Agency: Grey London
The company yesterday (9 April) confirmed it was in advanced discussions with its lenders to extend its current financing agreement, as it hopes to draw a line under its recent problems.
The £1.2bn deal – which involves a consortium of 17 banks including Royal Bank of Scotland and Barclays – will give Thomas Cook two more years' breathing space.
But it is expected to come at a cost to the company, which has been hit by a fall in demand for short-haul holidays because of the recession.
In return for the extension, Thomas Cook is expected to have to give the consortium 5% of its shares and may have to pay a one-off fee.
The expected deal comes just months after Thomas Cook secured an additional £200m financial facility from its banking group to battle the UK business's financial woes.
The group claimed the £200m would provide "increased headroom" to deal with the effects of "an uncertain economic environment" in November last year, following three profit warnings and the departure of Thomas Cook's chief executive, Manny Fontenla-Novoa.
Michael Johnson, Thomas Cook’s marketing director in the UK, told Marketing last week that the tour operator's summer 2012 bookings were down 2% on last year, a figure he was "pleased with" in view of the current economic climate.
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This article was first published on marketingmagazine.co.uk