Thomas Cook close to deal over future

The 170-year-old company said it is in “advanced discussions” with lenders, including Royal Bank of Scotland and Barclays, to agree a refinancing expected to extend the maturity of its bank loans to 2015.

The deal would provide the firm with stability following a period of crisis last year when it suffered three profit warnings, the departure of its chief executive and was forced to take an emergency £200 million loan.

However, it has been reported that the consortium of 17 banks will extract a heavy price for the new loans by including the right to take 5% of the company’s shares, as well as higher interest and a one-off fee.

It is understood that talks involving the banks and interim chief executive Sam Weihagen will be completed in coming weeks, while the group said it will update about its strategic review by the time of its interim results, which are expected by the end of May.

Thomas Cook, which has an annual turnover of £9 billion and 30,000 employees, had estimated debts of £1.25 billion at the end of September.

It plans a raft of asset sales to raise money to pay down its borrowings, including offloading the company’s stake in the air traffic control group Nats.

The group also said today it is considering selling some of its 90 aircraft to raise further cash as part of a ‘sale and leaseback’ deal that would see it rent them from the buyers.

Thomas Cook shares tumbled below 10p at the end of last year but have recovered to 20.5p since then. It recently announced a 2% fall in summer bookings in Britain but said a new advertising campaign has lifted the performance in recent weeks.