Thomas Cook shares rise

Thomas Cook shares rise

As trading opened this morning, Thomas Cook’s shares showed signs of slight recovery compared Tuesday’s sharp fall.

The company’s shares, which opened today at 11p, plummeted yesterday from 41p to close at 10.2p after Thomas Cook revealed that it was running out of cash.

The tour operator, which is 170 years old, has tried to increase its borrowings from the banks, claiming its business had slumped because of the tough worldwide climate - including political unrest in Egypt and flooding in Thailand.

It revealed it would need additional funds to tide it over the quiet winter trading season.

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.

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A statement released by the company yesterday 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.”

Full year results will not be released until the troubled tour operator has completed its discussions.