Travelex, owned by financial services group Finablr PLC (LON:FIN), has had its credit rating downgraded by Standard & Poor’s amid questions over its corporate governance and debt levels.
The money transfer giant is solely owned by Finablr, which in turn is 66% owned by BR Shetty, the founder and former chief executive of troubled private hospital operator NMC Health PLC (LON:NMC), and his son Binay Shetty through the family's holding company BRS Ventures.
READ: Finablr’s Travelex takes £25mln quarterly hit from ransomware attack, coronavirus
NMC is currently subject to an investigation by the Financial Conduct Authority and had it shares suspended last week after an independent review of the company’s finances uncovered “potential discrepancies” in bank statements, together with supply chain financing arrangements that had not been approved by the board.
The turmoil caused Shetty to resign as NMC's chairman, while the firm has also sacked its chief executive, placed its finance chief on extended sick leave and suspended an unidentified member of the treasury team for obstructing an independent investigation.
S&P said they believed the debt at Travelex was not sustainable and also raised questions about Shetty’s independent given his involvement with the situation at NMC Health.
Rival ratings agency Moody’s followed suit on Thursday, downgrading Travelex due to concerns over how the coronavirus pandemic will affect its business.
In an announcement, Travelex said it was “disappointed” by the decisions and that itself and Finablr were in discussions with major lenders regarding the terms of its revolving credit facility.
“Travelex continues to focus on its development plans and customer service. It is taking action to reduce variable costs, ensuring efficiency of cash stocks and reviewing its cost base”, the company added.
In an update on Monday, Finablr said it expected quarterly like-for-like earnings for its unit Travelex are going to be hit by £25mln as a result of both coronavirus disruption and a cyberattack in January.
The bureau de change was attacked by hackers, who swiped customers data and then demanded US$6mln as a ransom. The company had to shut down all customer-facing systems, which have now been restored.
Shares in Finablr plunged 19.7% to 39.4p in mid-afternoon trading on Thursday.