Thomas Cook announces further sell-off to cut debt
Thomas Cook has announced it is considering shedding more of its assets, including part of its fleet of holiday jets.
The statement was released on Monday following reports in national newspapers that the troubled travel company was attempting to negotiate a further two-year extension for loans totalling £1.2bn.
Thomas Cook confirmed that it was in "advanced discussions" with its banking group about extending its financing arrangements, but did not confirm the size of its debt.
"These discussions are part of the result of the strategic review the Group has undertaken since agreeing terms of a new facility in November 2011," it said. "The Group expects to report in more detail on the results of that review by the time of the interim results." The results are due in May.
It went on to say that, in addition to the previously announced asset disposal programme, which includes the sale of Thomas Cook India, the Group is exploring a possible sale and leaseback of aircraft.
The company announced last year it was to shed six aircraft, with the loss of 250 jobs, but a spokeswoman confirmed today it was now considering selling more of its fleet. However, this may not necessarily lead to further job losses or a reduction in capacity if these are leased back to the operator.
The Guardian on Saturday that a consortium of 17 banks, including Royal Bank of Scotland and Barclays, is expected to approve an extension of loans to Thomas Cook until 2015. Without the new deal, the Group will have to repay the bulk of its debt, which includes a £200m emergency loan secured before Christmas, within 12 months.
The Financial Times reported that Thomas Cook was offering the consortium of lenders five percent of the business in return for the two-year extension, which will also attract higher interest rates and cost the company a one-off fee, but will give it a three-year breathing space to turn the company around.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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