Travel giant aims to lift clouds of debt as summer sales improve

The move, which is part of a wider £1.6bn refinancing package, came as the tour operator reported encouraging trading for the summer season, including a 10 per cent reduction in the number of holidays left to sell compared with last year.

Under its new chief executive Harriet Green, Thomas Cook also said it had cut its losses to £275.6m for the seasonally quieter half year to March 31.

She said progress made over the last year in restructuring the business had enabled it to carry out the refinancing, which will include a deeply-discounted rights issue raising around £305m.

The UK’s second largest holiday operator, which staved off collapse a year ago following a rescue deal with its lenders, recently unveiled a new strategy based on offering “trusted and personal” holiday experiences and more city breaks.

It is also cutting costs by £170m in this financial year, an increase of about £25m on previous forecasts.

Ms Green said the refinancing will reduce the company’s “very significant debt”, lengthen its repayment profile and help it deliver its recovery plan.

She added yesterday: “We look forward to continuing the rapid transformation of the group so that we fulfil the potential of the Thomas Cook brand for our customers, suppliers and employees.”

Thomas Cook said it had sold around 60 per cent of its holidays for the summer season, an increase of two per cent on a year earlier.

The group appointed Ms Green, who is the former boss of Leeds-based electro components distributor Premier Farnell, as the person to lead its turnaround strategy last year,

The company was plunged into crisis in 2011 after it went back to its lenders to ask for an additional £100m lifeline,

Its turnaround plan for the UK business has included focusing on fewer and better-quality hotels and a drive for more online bookings.

The company can trace its roots back to 1841, when a cabinet-maker named Thomas Cook arranged a series of trips between Leicester, Nottingham, Derby and Birmingham on behalf of local temperance societies and Sunday schools.

He organised excursions for workers from Yorkshire and the Midlands to the Great Exhibition of 1851.

He later expanded the business to include escorted tours of Europe, and it has grown to become one of the best-known travel brands.

It was an official supporter of the London 2012 Olympic Games and Paralympic Games.

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