The language travel company STS Education has gone bankrupt. Around forty employees are losing their jobs and the company cannot answer what will happen to those who are already on trips.
”We have ended up in a situation where we have taken all the costs and received almost no income,” says CEO John Cedergårdh.
The bankruptcy application was filed with the Gothenburg District Court on Tuesday, after a tough financial time for STS.
”"It is of course completely linked to the pandemic. Our biggest destinations are the USA and the UK, where travel has basically been banned since March," says John Cedergårdh.
The business is seasonal, with the vast majority of people going on language trips in the summer. This has made up the lion's share of STS's revenue – money that will then cover expenses for the rest of the year.
THE COMPETITION DOES NOT INCLUDE STS ALP TRAVEL
STS Alpresor and STS Education have been two different companies with different owners for 10 years. The companies run completely separate businesses and have no legal ties.
”"We have ended up in a situation where we have taken all the costs and received almost no income. The entire language travel business has been shut down for safety reasons and we had hoped to get the high school students out, but it seems difficult," says John Cedergårdh.
According to the CEO, the company has "cut back on everything" during the spring and summer, laid off staff, and laid off as many people as possible.
”"But it won't be the amount required to compensate for an entire summer. It's terribly sad for us, the customers, the employees," says John Cedergårdh.
TT: Should you have had larger margins, so you could have managed this?
”"It's clear that people think that way now. But I don't know if there is any company that has an entire year's turnover saved. That's what we've lost now, an entire year's turnover. In addition, we've had a tough restructuring and digitalization journey in recent years that hasn't exactly helped this."”
During the spring and summer, STS has been in contact with both investors and banks to resolve financing going forward.
”"Everyone is very worried about what the future will look like, and unfortunately it has not been possible to achieve this," says John Cedergårdh.
STS Education also has more than ten subsidiaries, including in Italy, Germany and the USA, which are not included in the bankruptcy decision. The separate company STS Alpresor is also not included in the bankruptcy.
STS does not currently know what will happen to customers who are already traveling, or have booked a trip with a company.
”"We are completely focused on ensuring that those who are out or about to go are well. The bankruptcy trustee will try to find a solution where another actor takes over responsibility," says John Cedergårdh.
TT: What happens to those who have paid you money for a trip?
”"The situation is still uncertain about exactly what it looks like. It's still hard to say."”
The bankruptcy trustee is attorney Johan Sölveland.
”"The ongoing business is an asset in bankruptcy. We will try to sell it," he says.
There are a number of interested parties and talks will now be held to see if it is possible to get a new owner quickly.
”In the best of worlds, those who have contracts with the company, those who are going on a trip or are already on a trip, will not notice anything,” he says.
Source: TT
