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Voyages FRAM: what are the scenarios (including the worst) for the tour-operator’s recovery?

A pivotal week for the future of France’s #1 tour-operator


On the eve of a decisive week for the future of Voyages FRAM, the employees’ worries keep on growing: exactly how will the tour-operator from Toulouse be devoured? Especially after last Friday’s Ciri meeting was postponed to this week. As a result, following the not-so-reassuring statements made by Marie-Christine Chaubet, who once again affirmed her difference, the range of scenarios has drastically diminished.



The Chinese scenario in serious jeopardy

Photo from website of HNA Group dr
Photo from website of HNA Group dr
After weeks of preparation, the takeover plan elaborated by HNA/Selectour Afat was hit by the company’s critical financial and social situation.

Unforeseen events arose and, in the meantime, the Chinese group played the Spanish card and offered itself to the group Globalia.

A priori, there was no relationship between the two… But if voyages FRAM were to disappear (or weaken) on the French market, wouldn’t the Chinese-Spanish group be tempted to come fill that void?

Especially since its branch Travelplan had already done an intrusion on French soil, three years back.

In other words, what game is HNA playing today? Is it aiming at both?

Its reluctance of the last few weeks gives this impression.

It was a tough fight to get the Luxembourg branch (Hanash) to shyly consent, last Thursday, to make a firm acquisition offer, as we revealed in a previous article.

What is its true value? Today, no one is in a position to respond.

Enough to worry Bercy and its age-old support, the Interministerial Committee on Industrial Restructuring (CIRI), that never hid its preference for the alternative project offered by Promovacances…

Advantages
On paper, the HNA/Selectour Afat is the least harmful on the social aspect. While it enables the Asian conglomerate to get its hands on a leading French player, it also avoids the rupture that a bankruptcy proceedings would lead to along with the negative consequences on the company’s image, both for its clients and providers.

Disadvantages
Yet, there are still some grey areas. The ambiguity and attitude of the group, its shyness of the last few weeks, and the lack of an industrial project are all factors that worry public authorities. Furthermore, the very deteriorated financial and social situation of the tour-operator are also alarming. The 40 million euros of the transaction may not be enough to save it…

The French scenario is thriving more and more

Concretely, very little is known of the conditions of the Karavel-Promovacances offer, other than its amount of around 30 million euros, according to our informations.

An amount that, a priori, the shareholders deem to be insufficient.

In fact, it could (if we believe Les Échos) be adjusted downward in the framework of an audit delivered last Thursday, that stressed the financial deterioration of Fram’s balance sheet.

Quiet as always, the online tour-operator persists and insists: only bankruptcy proceedings will be able to save Voyages FRAM.

As always, Alain de Mendonça wants to overhaul all of the parameters. And only the Commercial Court will allow this.

Of course, the social harm will be substantial for the 880 employees (total workforce of the group, including foreign branches.)

Because while HNA evaluates at 20% the employment safeguarding plans necessary to get the machinery going, we can be pretty sure that Promovac is setting the bar much higher.

While the employees prefer the HNA solution with that of Georges Colson, majority shareholder, public authorities adhered to the French solution.

And this solution has just been reinforced by the flip-flopping of Marie-Christine Chaubet, a minority shareholder, who first supported (maybe against her own will) the Franco-Chinese offer.

But was this commitment subjected to an official commitment? This remains a mystery…

Advantages
Karavel Promovacances has proved its know-how in terms of acquiring companies experiencing difficulties. Its great management of the Switch-Partir pas Cher case has enabled the online agency to make thousands of clients travel without substantial injury to the APST. We can hope that the same goes for FRAM.
The project’s “realism” appeals to Bercy. On the one hand, because it favors a French solution, and on the other, because it no longer believes in the recovery of the company without a clearance of its accounts.
Finally, Promovacances’ know-how of online sales could make the Toulouse tour-operator take an important step.


Disadvantages
The employees (which is logical) do not hide their preference for the acquisition solution offered by HNA.
It would enable them to keep their jobs and the financial surface of the group which would be a guarantee of continuity, all other things equal elsewhere.
A bankruptcy proceeding, even if well planned, always tarnishes the image and reputation. FRAM would be no acception to the rule.
Even though we still do not know the main lines of the Karavel-Promovacances acquisition plan, we can predict that the absorption of this emblematic TO would weaken the already feeble French production.
It is difficult to believe that the considered perimeter would preserve the company's spot as the 4th leading French tour-operator. The same consequence would affect the distribution branch that is structurally loss-making.

Is a mix scenario conceivable?

If the hypothesis of an alliance between the two projects was momentarily considered, the evolution of the cases quickly ruled it out.

It now seems more and more unlikely. Indeed, the respective positioning of the two players and their business models make them hardly compatible.

Of course, the unknown social situation that has been anesthetized (left aside?) by the possibility of a takeover and continuation of the activity by HNA/Selectour-Afat could change everything.

Because the indifference of Unions and that of FRAM’s personnel has not yet weighed much on the scale. Could a last minute protest have some kind of effect?

The question deserves to be asked…

The disaster scenario of filing for bankruptcy

As we write this article, there is one hypothesis that can no longer be ruled out. It is mentioned in the columns of our colleagues Les Échos on Sunday's issue; that of a pure and simple bankruptcy petition of the 4th leading French tour-operator.

Indeed, the financial situation of Voyages FRAM would have strongly deteriorated in the last few weeks.

This void would amount to tens of millions of euros and would no longer allow the offer of an “in bonis” acquisition, in other words without going through a mandatory bankruptcy petition.

If this disaster scenario were to unfold should both current protagonists decide to quit, then the outcome could be catastrophic.

Indeed, other than the social harm this will lead to, dozens of travel agents could also be taken down with the collapse of the tour-operator from Toulouse.

Written by Jean Da Luz translated by Joséphine Foucher the 19/10/2015
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Tags : Fram

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