Last Friday, Thomas Cook, the heavily indebted British travel company, said that it was in negotiations with its lenders about bolstering its finances, after recent media speculation regarding the ability of the firm to pay its debts.
The firm, which placed its profitable airline business up for sale last February, has endured a tumultuous few days on markets, with its shares closing down by 15 percent last Thursday.
Peter Fankhauser, the Thomas Cook Chief Executive, stated: “We have (…) taken the proactive step to approach our financing partners and are engaged in constructive discussions to ensure we have the flexibility and resources to continue investing behind our plans over the long-term,”
Thomas Cook refused to comment on a report that was published by Bloomberg last Thursday that three of its lenders accepted steep losses to exit a loan facility to the firm.
Last Friday, Sky News reported that it was in advanced negotiations for approximately 400 million pounds of new loans.
Last year, the oldest travel firm in the world struggled when a heatwave in northern Europe deterred holidaymakers, resulting in two major profit warnings.
The company said that its liquidity position was strengthening heading into this year’s key summer period, however, it said that it was acting proactively to make sure that it had the financial flexibility to maintain an “appropriate liquidity buffer through the (2019/2020) winter.”
The shares of Thomas Cook were down by 0.8 percent last Friday.
The yield on the euro-denominated bonds of Thomas Cook that mature in 2022 hit a record high of 29.896 percent earlier last Friday, while the bond’s price dropped to a record low of 57.701 cents. However, the bond’s price ticked up from those lows in afternoon trade.
Last Wednesday, Reuters reported that Thomas Cook has set a deadline of May 7 for expressions of interest in its airline business. Sources said that Lufthansa and Indigo Partners are perceived as likely bidders.