Thomas Cook agrees £200m bank loan
26.11.11
Thomas Cook has reached agreement with its bankers to provide it with £200m in new funding. Shares in the travel company fell 75% on Tuesday after it said it was in talks about increasing borrowings, after weak consumer confidence due to political unrest in Egypt and Tunisia and floods in Thailand hit sales.
Its bankers, including Barclays, HSBC, RBS and UniCredit, have agreed to provide a new £200m facility until 30 April 2013. This new deal replaces the £100m short-term credit agreement announced on October 21. In addition, its banks have agreed a further relaxation of the financial covenants under the existing facilities. At the end of September the firm's net debt was just under £900m. The new loan will take the figure to over £1bn.
Group chief executive Sam Weihagen said: 'I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly. 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.'
Mr Weihagen said he would be reviewing the entire business which, while strong in Scandinavia and Germany, had suffered 'profitability problems' in the UK. He said: 'We are working on, and actually have really started on a turnaround programme for the UK which will make it a much more efficient and much more profitable company.'
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