Travel agent Thomas Cook has taken another step towards calmer waters by announcing a £425 million fundraising with shareholders in a bid to cut debt.
The move, which is part of a wider £1.6 billion refinancing plan, came as the tour operator reported encouraging trading for the summer season, including a 10 per cent reduction in the number of holidays left to sell compared with last year.
Thomas Cook said the refinancing would improve its creditworthiness in the eyes of suppliers and trading partners “and provide a platform to enable the group to resume dividend payments in the future”.
Under new chief executive Harriet Green, Thomas Cook also said it cut losses to £275.6m for the seasonally quieter half year to 31 March.
Green said progress made over the last year in restructuring the business had enabled it to carry out the refinancing, which will include a deeply-discounted rights issue raising around £305m.
The UK’s second largest holiday operator, which staved off collapse a year ago following a rescue deal with lenders, recently unveiled a strategy based on offering “trusted and personal” holiday experiences and more city breaks.
It is also cutting costs by £170m in this financial year, an increase of about £25m on previous forecasts.
Green said the refinancing will reduce the company’s “very significant debt”, lengthen its repayment profile and help it deliver its recovery plan.
She added: “We look forward to continuing the rapid transformation of the group so that we fulfil the potential of the Thomas Cook brand for our customers, suppliers and employees.”