Thomas Cook Group Plc, the 170-year- old UK tour operator that secured an emergency loan to survive, agreed to a new financing package with lenders and said it was in talks to sell aircraft as part of a recovery plan.
The £1.4-billion ($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 on Saturday. Thomas Cook also said a strategic review had 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 was “progressing well”. The holiday company is also selling assets, including an Indian unit, after posting an annual loss of £521 million and suffering a drop in bookings in the UK and elsewhere in northern Europe.
Thomas Cook said it was 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 chief executive Manny Fontenla-Novoa stepped down, banks agreed in November to provide a £200- million loan to the tour operator. The latest financial package has revised financial covenants offering greater flexibility, it said.
The £1.4-billion package comprises a £150-million amortising term loan, £850-million revolving credit, the £200-million liquidity facility agreed in November, and a £200-million 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.
