Thomas Cook, a UK-based travel company that is currently experiencing much publicised financial difficulties, has issued a circular to its shareholders, highlighting the importance of their backing of the company’s plans for raising funds.
The fundraising plan involves the sale and leaseback of part of its airline fleet, and the sale of five Spanish hotels. The company’s shareholders are to vote on the disposals at a meeting in London on May 29, and the group has stated that it is confident that its investors will decide to back the planned disposals. However, the Daily Telegraph has reported that should the investors fail to support the plan, they will be jeopardising the company’s recently agreed GBP1.4bn deal with lenders, including Royal Bank of Scotland and Barclays, to extend its bank loan maturity until 2015.
The sell-offs are part of a broader plan for the UK business, to base its recovery on fewer hotels that are of better quality, and to actively generate more on-line bookings.
‘Thomas Cook is doing just fine and our customers’ holidays are completely safe. Our banks have been very supportive and we have a new, flexible three-year banking deal in place. We fully expect the hotel sale and the sale and leaseback to go ahead as planned,’ said a company spokeswoman.
Winter Season losses of GBP262.7m were confirmed in the shareholder’s circular, and blamed on poor performance across the company’s French and North American businesses. Second half bookings were claimed to be more encouraging, but overall figures were said to depend on the strength of late bookings.