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Asiatravel announces restructuring exercise; Singapore HQ to be shifted to Philippines
THE board of travel website Asiatravel.com announced it is taking steps to streamline the group's business and focus on profitability after undertaking a "comprehensive review" of its various businesses.
The group announced - after the market had closed - that it will undertake a restructuring exercise to divest, close and scale down lossmaking business lines and subsidiaries.
Under the exercise, the group intends to move its central Singapore operations to the Philippines, where it says it holds a leading position and enjoys "significant" market share.
It also intends to scale down its business-to-consumer (B2C) business, and close B2C units in all other operating destinations and manage its operations from the Philippines.
On its business-to-business (B2B) operations, the group said it will significantly ramp up its efforts there as it recorded a compound annual growth rate of more than 50 per cent since its launch in 2012, adding that the increase in revenue from its B2B business will offset the decline in revenue from the downscaling of its B2C operations.
In other areas, the group intends to dispose of its 50 per cent-owned loss making offline wholesaling units and review its transportation and ground tour operations, with a view to outsource them, among other options, to reduce maintenance costs and improve cash flow.
Operating expenditure will fall significantly with the above measures in place, the group said, adding the savings will go towards launching an augmented reality digital tour project with a technology partner.
Asiatravel expects material impact on its financials with the restructuring exercise, with a substantial portion of the impact to be on non-cash items.
"After the completion of the restructuring exercise, the group will have a much leaner organisational structure and improve its cash flow."
Asiatravel announced the departure of its lead independent director Heng Su-Ling Mae in a separate statement earlier in February and is currently looking for her replacement.
Asiatravel's counter closed at 4.3 Singapore cents on Wednesday, down 0.1 Singapore cent or 2.27 per cent.