THOMAS COOK has launched a firesale of its Spanish hotels as part of a wider plan to cash in on non-core assets and stave off a debt crisis.
The group’s shares plunged 75 per cent yesterday after it said it had opened fresh talks with its lenders in an effort to increase borrowing for the second time in a month.
The tour operator has also walked away from a rights issue, a source said yesterday, although the fundraising – thought to have been in the region of £400m – could yet be revived.
Yesterday Thomas Cook told investors it is seeking a further £100m in short-term funding from a syndicate of 17 banks. It needs the cash to support it through the winter trading period and to put off the danger of breaching banking covenants. It has also postponed publication of its final results, which had been due tomorrow, until after the talks.
Interim chief executive Sam Weihagen (pictured), said trading had “deteriorated” in recent months and blamed the state of the European economy and a slow recovery in tourism in the Middle East. Analysts said the renewed talks with lenders throw into question the future of the 170-year-old firm.
Thomas Cook, which has issued three profit warnings in the past 18 months, is looking to raise £200m from a sale of hotels, offices and at least 200 of its agencies to help pay down its burgeoning £900m debt.
Manny Fontenla-Novoa quit as chief executive in August with a £1.1m payoff.