Thomas Cook has announced that they have received a rescue injection of £200m. The group reached agreement with their banking group to provide the company with a new facility that significantly improves the robustness of its financial position. The banks in question, led by Barclays, HSBC, RBS and UniCredit, have agreed to provide a new £200m facility available until 30 April 2013, which replaces the £100m short-term facility announced on 21 October 2011. In addition, they have agreed a further relaxation of the financial covenants under the existing facilities. The revised covenants will also apply to the new £200m facility:
• Leverage: net debt to leverage EBITDAR < 5.0x in December 2011; < 4.75x in March 2012; <4.5x thereafter.
• Fixed charge: fixed charge to EBITDAR > 1.5x
This provides the Group with much increased headroom to deal with unexpected events and the effects of an uncertain economic environment.
Alongside the news of this £200m loan, Thomas Cook has stated it will undertake a strategic review. Many have said that the group is currently poised to start cutting 1,000 jobs, a move which was previously reported in the media with the mention of 200 stores being shut.
The group will announce its preliminary results for the twelve months ended 30 September 2011 during the week commencing 12 December 2011.