Thomas Cook reveals €300m bond raise in the hope of reducing core facilities by £200m

Oliver Gill
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Thomas Cook has had a rocky few years but is hoping the new bond will help

Thomas Cook today revealed plans for a new corporate bond to raise at least €300m (£256m) in an attempt to strengthen its balance sheet.

The travel group has a hefty £1bn on corporate bonds currently placed on the market and plans to use the latest issuance to fund repayment of £200m of bonds which mature in 2017 and part of a later bond maturing in 2020.

Read more: Thomas Cook invests in more own-brand hotels across Europe

The new notes would have a maturity of 2022 with an option for Thomas Cook to repay them after two and a half years.

Thomas Cook said by extending its debt profile it will have sufficient wriggle room to more efficiently run the business and achieve its target of reducing lending by £200m within the next two years.

Last week, the FTSE 250 group revealed full-year profits were just in the black: profit after tax was £9m, less than half of the £19m generated in the previous year.

Read more: Thomas Cook takes £10m profit hit after rocky year for tourism

Chief executive Peter Fankhauser said the results proved progress had been made in "a difficult year for tourism". The market appeared to agree with his sentiment as shares jumped around nine per cent in the wake of the results.

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