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Lenders have agreed to extend the maturity of the loans until May 2015, which Thomas Cook said placed the group on a much firmer footing.
The deal, pulled off by Group interim chief executive Sam Weihagen, also allows Thomas Cook to keep net proceeds from certain disposals to provide additional liquidity.
“The announcement highlights the confidence our lenders have in Thomas Cook and we are delighted that they have demonstrated their on-going support,” he said.
However, the new deal will cost Thomas Cook a 1% amendment fee and the banks will be granted warrants to subscribe for new ordinary shares, representing 5% of the issued share capital of the Group, at an exercise price of €0.10 per share.
The Thomas Cook Board has completed its strategic review, announced last year, which includes reducing its debt by shedding its assets, including the sale and leaseback of 17 to 19 aircraft, negotiations for which were at an advanced stage, said Weihagen.
So far, the company has reduced its debt by £1.35m, including most recently the disposal of the Explorers Hotel in France. The Board will seek shareholder approval for the disposal of HCV hotels later this month.
Group chairman Frank Meysman said: “I would like to personally thank Sam Weihagen, Paul Hollingworth and the team for the actions that they have taken and continue to take to strengthen the Group’s financial position. This bank agreement, together with these actions, places Thomas Cook on a much firmer footing.”
The search for a permanent chief executive to replace Weihagen, who delayed his retirement to take the helm at Thomas Cook following the sudden departure of Manny Fontenla-Novoa, is still ongoing. However, Meysman said it was “progressing well”.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
