Thomas Cook Secures £200m Lifeline

Thomas Cook Secures £200m Lifeline

Troubled holiday firm Thomas Cook has announced it has secured a £200m credit facility, amid fears it would be forced to shut 200 travel agencies.

Shares in the company plunged by 75% on Tuesday after it announced it was in talks with its banks to shore up its finances after trade continued to deteriorate.

Thomas Cook has cited the unrest in North Africa as a major contribution to a slump in sales.

The new deal is led by Barclays, HSBC, Royal Bank of Scotland and UniCredit SpA. The banks have agreed to provide a new £200 facility, available until April 2013, which replaces the £100m short-term facility announced in October.

"I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly," said group chief executive Sam Weihagen.

"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."

Thomas Cook's competators have sought to take advantage of their rival's misfortune, with Tui Travel placing a full-page advert for its Thomson holiday company in a newspaper that read: "Another holiday company may be experiencing turbulence, but we're in really great shape."

Speaking on BBC Radio 4's Today programme this morning Thomas Cook chief executive Sam Weihagen insisted he did not want to shut down the company's high street operations.

"Sixty-five per cent of all the bookings that we take in peak seasons are done through shops, so in this country there are still a lot of people who feel more secure making their holiday reservations in shops than on the internet," he said.

Close

What's Hot