Thomas Cook shares crash on bank discussions

Thomas Cook shares crash on bank discussions

Shares in Thomas Cook crashed earlier as the tour operator admitted “deterioration” in trading conditions had forced it to seek further credit with banks.

Thomas Cook said it would need additional funds to tide it over the quiet winter trading season with, shares falling over 70 per cent to just nine pence per share in morning trading.

A slight recovery saw the company down 68 per cent to 11 pence at 11:00 on the London Stock Exchange.

Only last month Thomas Cook – which lost it chief executive Manny Fontenla-Novoa earlier this year - said it had agreed a £100 million increase in credit facilities with banks.

A statement read: “Thomas Cook Group announces that as a result of deterioration of trading in some areas of the business in the current quarter, and of its cash and liquidity position since its year end, the company is in discussions with its principal lending banks with regard to its facilities during the seasonal low period of cash in the business.

“While the company currently remains in compliance with its financing covenants, it also intends to seek agreement from its lending banks to adjustments that will improve its resilience if trading conditions remain difficult.”

As a result, Thomas Cook confirmed it would delay the announcement of its full year results until these discussions are concluded.

The organisation launched a “fundamental review” of its activities earlier this year, with conclusions due to be published along with full year results.

A Thomas Cook spokesperson described the latest discussions as “pro-active”, with the company still expecting to reveal a headline profit “in line with expectations”.