Thomas Cook asks lenders for extra £100m funding headroom
The company has turned to its banks for more financial help following a deterioration in trade driven by weak consumer confidence and unrest in North Africa. Ernst & Young has reportedly been drafted in by the company’s syndicate of lending banks, which include Lloyds Banking Group and Royal Bank of Scotland, to advise them on forthcoming negotiations.
Thomas Cook revealed it had returned to its lenders for an extra £100m in funding headroom – just four weeks after it agreed a similar top-up. The announcement saw shares in Thomas Cook dive 75 per cent on Tuesday to 10.2p. The company’s shares partially recovered yesterday, rising 20 per cent, but the price is still 93 per cent lower than it was at the start of the year, valuing the company at around £107m.
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Hide AdThe group – which postponed today’s publication of its full-year results until after talks with its lenders have concluded – said on Tuesday it was looking to support itself through December and January, which is the toughest time of year for the business.
Sam Weihagen, Thomas Cook’s interim chief executive, insisted the company was a “robust business that has a great future”.
Thomas Cook said its French and Belgium markets have seen bookings fall by up to 20 per cent.
The firm is understood to be considering the closure of 200 stores after its merger with the Co-op’s UK high street travel business. There are 60 Thomas Cook and 66 Co-operative Travel retail stores in Yorkshire.