Thomas Cook saved by deal

Travel firm secures agreement to extend terms of its £1.4bn debt as it struggles to improve finances

Thomas Cook, the struggling package holiday group, has secured its future with a £1.4bn debt-refinancing deal.

The quoted group announced this weekend that it had extended its financing by two years to May 2015. The deal with its lenders gives Thomas Cook a more stable capital structure and the flexibility to repay its debt when it has the cash to do so.

The company suffered a terrible 2011, with families cutting back on holidays as the UK economy tightened. The chief executive, Manny Fontenla-Novoa, left the 170-year-old company last summer, when it was forced to approach its 17 banks for new financing. It needed a £200m rescue package in November.

The company has yet to name a permanent replacement for Mr Fontenla-Novoa, though the chairman, Frank Meysman, said yesterday the search for a boss was "progressing well". Mr Fontenla-Novoa's deputy, industry veteran Sam Weihagen, has taken on the top role in the interim.

He said that the board "continued to make good progress in strengthening the group's financial position".

This "progress" includes selling off some assets. The group confirmed that it is close to a sale-and-leaseback of between 17 and 19 of its 91-strong fleet of aircraft. It is thought that this deal could raise around £100m.

Thomas Cook is also selling a 51 per cent stake in Hoteles Y Clubs De Vacaciones, which indirectly owns a golf club and several Spanish hotels. The deal will cut its debt by around £75m.

A circular to get shareholder approval for both of these deals will soon be distributed to investors ahead of the annual meeting later this month. To date, the group has cut £135m from net debt in its attempts to turn the business around.

The travel agent has also vowed to conduct a review of its poorly performing businesses in Russia, Canada and France. In the statement accompanying the refinancing announcement, Thomas Cook said that there was "substantial scope to improve the results of these businesses", but warned that French "market conditions remained very challenging".

Thomas Cook shares closed at 21p on Friday; a year ago they were worth more than 170p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Sport
football This was Kane’s night, even if he played just a small part of it
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
News
Threlfall says: 'I am a guardian of the reality keys. I think I drive directors nuts'
people
Voices
voices The group has just unveiled a billion dollar plan to help nurse the British countryside back to health
News
The Westgate, a gay pub in the centre of Gloucester which played host to drag queens, has closed
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss