Tourism group rejects report it's in financial trouble

Australian tourism group Stella, which owns the Harvey World Travel and United Travel brands in New Zealand, has rejected a report in an Australian newspaper claiming the company is close to collapse.

The Australian yesterday said it understood accountants close to UBS, Stella's main banker, had recommended it place Stella into receivership or sell assets immediately to stem losses.

UBS supported private equity player CVC Asia Pacific in buying two-thirds of the tourism business last year from the now-collapsed Gold Coast financier MFS.

The companies are thought to have pumped A$1.3 billion ($1.64 billion) into the deal. But the Australian said it understood about A$1 billion had been lost on the deal as experts say the stake is now worth only A$250 million to A$350 million.

Stella Travel Services NZ managing director Stephen Humphreys said the company flatly rejected the suggestions made in the article.

"We totally and unequivocally reject the suggestions that we are close to collapse or that we have been recommended to call in receivers."

In New Zealand Stella owns and has franchise agreements with 65 Harvey World Travel stores and 90 United Travel stores. It also owns the former Gullivers Travel operation and Go Holidays.