Thomas Cook extends banking deal

18th Jul 2011
Thomas Cook extends banking deal

Travel agent Thomas Cook has confirmed it will extend its banking facilities while it undergoes a “fundamental review” of its activities.

The bank facilities – which include a £200 million term loan and an £850 million revolving credit arrangement – were extended by one year to May 2014.

In addition, the interest margin on the facilities has been reduced with immediate effect.

The margin over LIBOR on the term loan facility has reduced to 2.25 per cent and on the revolving credit facility has reduced to a rate between 2.00 per cent and 2.50 per cent dependant on the proportion of the facility that is drawn, Thomas Cook said in a statement to market earlier.

The margin was previously 2.75 per cent for both facilities.

Paul Hollingworth, chief financial officer of Thomas Cook Group, commented: “We are pleased that we have extended the term of our committed bank facilities by one year as well as reducing the interest margin paid. 

“As stated in our recent trading update, we continue to perform well on cash flow, with circa £900 million of available cash and committed facilities. 

“We are focussed on reducing our debt and strengthening our balance sheet and we have a number of initiatives underway to deliver progress on this including the disposal of certain hotel and surplus assets.”

Asset Sale

Thomas Cook is preparing a sale of assets worth more than £200 million as it enters the most important period since its launch as a listed company in 2007.

Shares in the company lost nearly half of their value last week following a profit warning.

Shares were trading at roughly 70 pence earlier – almost £2 below their value 15 months ago - prompting speculation of a potential takeover bid for the company.


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