Business

Thomas Cook shares bounce higher on £200m rescue deal

Thomas Cook Group

Last Updated at 16 Feb 2018, 16:30 GMT Thomas Cook Group twelve month chart
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Shares in travel firm Thomas Cook were 23% higher in afternoon trading on news of £200m of new financing for the firm, but remain 88% down since January.

On Saturday the firm reached agreement with its lenders to provide it with new access to funding.

Shares in the company initially fell 75% on Tuesday after it said it was in talks about increasing borrowings.

Thomas Cook has blamed unrest in Egypt and Tunisia and floods in Thailand, all key destinations, for hitting sales.

Its lenders, including Barclays, HSBC, RBS and UniCredit, agreed to provide a new £200m facility until 30 April 2013.

The new deal replaces the £100m short-term credit agreement announced on 21 October.

'Profitability problems'

Group chief executive Sam Weihagen said on Saturday: "We will go on with what we said we were going to do some time ago, we are going to strengthen our balance sheet making sure that we will be a much stronger financial company."

At the end of September, the firm's net debt was just under £900m. The new loan will take the figure to over £1bn.

Mr Weihagen said he would be reviewing the entire business, which - while strong in Scandinavia and Germany - had suffered "profitability problems" in the UK.

Thomas Cook has said it will issue its preliminary financial results, for the 12 months to 30 September, during the week beginning 12 December.

These had been delayed until the loan talks concluded.

Thomas Cook has reassured customers that their bookings are protected.

However, people who have only booked a flight with the company will not be covered by the Atol scheme and are advised to buy suitable travel insurance.

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