Bloomberg News

Thomas Cook Agrees on $2.3 Billion Refinancing Package

May 05, 2012

Thomas Cook Group Plc, the 170-year- old U.K. tour operator that secured an emergency loan to survive, agreed to a new financing package with lenders and said it’s in talks to sell aircraft as part of a recovery plan.

The 1.4 billion-pound ($2.3 billion) refinancing extends the maturity of borrowings until May 31, 2015 and provides “further stability” to the business, the company said in a statement today. Thomas Cook also said a strategic review has been completed.

“This bank agreement, together with these actions, places Thomas Cook on a much firmer footing,” Chairman Frank Meysman said in the statement.

Meysman said the search for a permanent chief executive officer to replace interim leader Sam Weihagen is “progressing well.” The holiday company is also selling assets, including an Indian unit, after posting an annual loss of 521 million pounds and suffering a drop in bookings in the U.K. and elsewhere in northern Europe.

Thomas Cook said it’s in advanced negotiations on the sale and leaseback of between 17 to 19 aircraft and has also received a “good level” of interest in its Indian business.

Three months after former CEO Manny Fontenla-Novoa stepped down, banks agreed in November to provide a 200 million-pound loan to the tour operator. The latest financial package has revised financial covenants offering greater flexibility, it said.

The 1.4 billion-pound package comprises of a 150 million- pound amortising term loan, an 850 million-pound revolving credit, the 200 million-pound liquidity facility agreed in November, and a 200 million-pound bonding and guarantee credit line, according to the statement.

“The terms will be amended to extend the maturity on all these facilities until May, 31, 2015 with no fixed repayments,” the company added. Thomas Cook will also keep proceeds from some asset sales to “increase liquidity,” it said.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

To contact the editor responsible for this story: Mike Harrison at mharrison5@bloomberg.net


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