USIT, the company that launched a thousand student holidays, has become the latest casualty of the events of September 11th. The Dublin-based student travel company confirmed last night that it was in financial difficulties and was likely to be sold.
USIT's banks, including National Irish Bank, Bank of Ireland and Ulster Bank, have appointed accountants KPMG to examine the financial situation at the business, which may have a deficit of up to €12 million.
The company, now called USIT World, was founded in 1959 and has grown from a two-person travel agency into the the world's second largest student travel company with operations in 66 countries and 1,500 staff. Its founder is Dublin businessman Mr Gordon Colleary, who owns 28 per cent of the company. He was unavailable for comment last night.
Last night, USIT World said: "We confirm that we are working with our financial advisers in order to come up with additional finance to deal with the substantial losses incurred in our US subsidiary, which we acquired on September 1st." The company did not identify the US subsidiary but it has a stake in Council Travel, one of the largest campus travel companies in the US.
"The events of September 11th resulted in substantial losses in that subsidiary, which could not be recouped from normal trading. The business has since recovered strongly," USIT said .
The company's problems are all the more surprising as the group was valued at more than €120 million in mid-2000 when Mr Colleary and the other main shareholders bought out the Union of Students of Ireland's 12 per cent stake for €11.43 million.
USIT's business is built around student travel and it is synonymous with the J1 visa programme under which some 7,000 Irish students travel to America to work each summer. The company has expanded into student travel in Australia, France, Bulgaria, New Zealand, Spain and elsewhere.
USIT World does not publish detailed financial information but the Irish operation turns over £51 million a year and makes profits of £2 million. The company has said in the past that Ireland accounts for only 20 per cent of turnover, which implies worldwide sales of around £250 million.
The other major shareholder is is a trust called Kramerdale, which owns a 45 per cent stake. Last night a spokesperson for the company said that it was fully licensed and bonded as required under Irish law.
