Thomas Cook Secures New Financing From Banks
Thomas Cook Group, said it will borrow another GBP£100 million (USD$154 million), easing fears about the future of the world's oldest travel company, whose shares slumped earlier in the week when it asked its banks for new funding.
The 170-year-old company said its banks, led by Barclays, HSBC, Royal Bank of Scotland and UniCredit, had agreed to provide a new GBP£200 million facility available until April 2013, which replaces the GBP£100 million short-term facility announced in October.
The banks have also agreed to relax the terms of an upcoming key test of its financial health, Europe's second-biggest travel company said on Friday.
"This provides the group with much increased headroom to deal with unexpected events and the effects of an uncertain economic environment," the company said in a statement.
Thomas Cook shares, which had lost 94 percent of their value since the start of the year, fell 75 percent on Tuesday when it asked lenders to come to its rescue for the second time in five weeks. The stock closed 10 percent higher at GBP£18.02 on Friday.
"I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly," acting chief executive Sam Weihagen said in a statement.
Thomas Cook has been hit hard by tough trading conditions, especially in Britain, where its core customer base of families with young children has been particularly affected by tough economic conditions. It was also hit by unrest in popular destinations such as Egypt, Tunisia and Morocco.