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Thomas Cook details £1.6bn refinancing 16 May 2013

Thomas Cook has outlined a £1.6 billion refinancing plan and is seeking to raise £305 million from a rights issue of new shares at 76p per share.

The move – designed to accelerate the turnaround of the embattled travel group – pushed shares up above 155p per share when it was announced to the market on Thursday (16 May).

Harriet Green, chief executive officer of Thomas Cook, said the financial results are improving and the announcement was further evidence of plans to strengthen the business’ balance sheet.

Her colleague Michael Healy, chief financial officer of the company, added: “This successful synchronisation of a new bank facility, new bond issue and new equity issue, which reduces leverage and strengthens our liquidity profile, highlights a new found confidence in our business, not just within the business but also from our external stakeholders.”

Healy confirmed the update to the company’s credit profile by ratings agency S&P and Fitch as part of the refinancing announcement.

The company also announced half year results showing a further decline in pre-tax losses during the six months ended 31 March 2013. Pre-tax losses stood at £391 million, down from £584 million the previous year.

This reduction in losses came about as the benefits of the cost cutting programme began to feed down into the business. Net debt still stands at £1.2 billion, however.



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