Online travel business Roamfree up for sale after falling into administration

The administrators of failed online travel company Roamfree have launched a sales campaign for four of the company’s subsidiaries after the group hit the wall last week.

Roamfree, which was founded by travel industry veteran Tony Smith in 2006, was placed in the hands of Tim Michael and Will Colwell of insolvency firm Ferrier Hodgson on 24 August.

The company had been trying to reach a deal with its noteholders to come up with a workable debt-servicing plan. But after being unable to reach agreement, the board was left with no choice but to put the company in the hands of administrators.

“From my initial review of the company’s affairs, it appears that funding provided by noteholders and investors has been exhausted by business investments and acquisitions and the costs of developing its online offering,” Michael said in a statement. “The current economic climate, resulting in reduced travel and accommodation bookings, has also negatively affected the performance of the group.”

While the Roamfree entity is in the hands of administrators, the company’s trading businesses – BookEasy, Horizon, Roamfree and Roamfree advanced – remain open for business.

It is these companies that are now on the sale block.

Tourism Technology, in which Roamfree owns a majority share, is also continuing to trade. Its founder and CEO Graeme Hunter remains in control of the business and said in a statement that he will work will the administrators to find the best outcome for the business.

Tony Smith shot to prominence in the early 2000s thanks to his first travel business, BreakFree, which he eventually sold to financial services, property and travel business MFS.

Smith was valued at $103 million back in 2006, but much of his fortune was locked up in MFS shares. When the company collapsed in early 2008, Smith’s fortune disintegrated and he was forced to sell many of its assets, including his Gold Coast mansion and stake in Roamfree.

Roamfree was a classic roll-up play. Over 2006 and 2007 the company spent more than $30 million on a string of acquisitions, including the purchase of 90% stake in Tourism Technology for $16.8 million in September 2007.

According to a recent repot, Smith has now moved to Bali to start a new tourism venture.

A meeting for Roamfree creditors has been scheduled for 3 September.