Nustay files for bankruptcy following serious challenges of the COVID-19 crisis
Nustay A/S (“Nustay”) has today announced that as a result of the COVID-19 crisis, it will be filing for bankruptcy. The company has experienced a very significant drop in sales volume due to the continuing global travel restrictions - with sales at 5% of the volume of January and February 2020. This continued industry-wide uncertainty has also made meant that the company has been unable to secure sufficient funding to continue operations.
COVID-19 crisis has continued to present difficult challenges
As a result of the continuing global travel restrictions, Nustay’s Board of Directors have announced that the company will be filing for bankruptcy. Despite introducing a sequence of measures to face the challenges, including cutting overhead spend by 80% and readjusting the marketing strategy to ensure ROI positive sales across all bookings, Nustay has been unable to compensate for the global drop in travel demand. The company has seen its sales drop to around 5% of the volume at the start of the year and without clear indications on when the travel industry might recover again, the company has been unable to secure the necessary financing to continue operations.
Global uncertainty has impacted securing sufficient funding
Over the last few months, Nustay’s management has been working intensely to secure the necessary funding to continue operations until the market recovers. A number of refunding structures have been explored and discussed with shareholders, investors and other stakeholders. However, because of the significant uncertainty over when the travel and hotel market will see some recovery, the Board of Directors has been unable to secure the sufficient funding security for continued operations at the present level.
Bankruptcy: the next steps
The bankruptcy process is expected to be as follows. On Monday 5th October, Nustay will file an application for bankruptcy through ‘Skifteretten’ (the Danish court handling bankruptcies and liquidations). Skifteretten will then examine the application - which the company expects will be approved within a short time period. Upon doing so, Skifteretten will appoint a liquidator to handle the liquidation process.
For further information about Nustay, please contact:
Investor Relations, Nustay A/S
E-mail: investor@nustay.com
Website: www.nustay.com
This information is information that Nustay A/S is obliged to publish following the EU Market Abuse Regulation. The information was provided by the contact person above for publication on October 4th, 2020.