Thomas Cook passes refinancing package

Published:  10 May at 9 AM

As reported by the BBC, Thomas Cook has revealed a refinancing package valued at £1.4 billion ($2.3 billion) which will offer the troubled tour operator another three years to pay off its debts.

The firm says that the new arrangement gives it more sustainability and financial flexibility. Shares in Thomas Cook, which have dropped by over 80 percent during the past year, started up 11 percent before slipping back.

In 2011, the company issued three separate profit warnings before being forced to accept an emergency £200 million loan. CEO Sam Weihagen said that today’s announcement underscores the confidence its lenders have in the company, adding that the team is delighted to have the ongoing support.

The firm is continuing to make good strides in fortifying the group's financial situation, and its disposal plans (which include leaseback and aircraft sale) are also proceeding well, added Weihagen.

The refinancing programme consists of the £200 million ($323 million) loan which was taken out in November 2011 and an £850 million ($1.4 billion) credit facility. Also part of the package is the loan’s interest rate, which will go up to 3.5 percent.

The operator has also announced its completion of a strategic review of the company, saying it will focus on reducing debt and fortifying its financial situation by addressing under-performing businesses and selling assets.