Thomas Cook warns that disposals are a must

Thomas Cook warned its shareholders this weekend that their failure to back two disposals could lead to the firm going into administration.

The tour operator has posted documents to shareholders in which it explains the financial importance of the sale and leaseback of part of its aircraft fleet and the disposal of five Spanish hotels.

Thomas Cook said its directors were confident that shareholders will deliver the required majority when they vote on the disposals at a general meeting in London on 29 May.

Failure to support the fundraising move would jeopardise the company’s £1.4 billion deal with lenders, including Barclays and Royal Bank of Scotland, to extend the maturity of its bank loans to 2015. That agreement has been hailed as a key step in strengthening confidence in the holidays firm, which blamed a “number of exceptional external shocks” since 2010 for poor trading.

In this weekend’s circular, it confirmed losses of £262.7 million for the winter and said the particularly poor performance of its North American and French businesses contributed to the bigger half-year loss.

Bookings for the second half have been more encouraging but Thomas Cook said much will now depend on how it performs in the important “lates” market.

In November, the company asked lenders for a £100m lifeline, sparking fears of a collapse, but it is now hopeful that it has a platform for recovery.