Thomas Cook, Europe's second biggest travel group, said Friday it had reached a new deal with banks for access to £200 million ($310 million, 232 million euros) of funding until April 2013. The British firm's stock plunged earlier this week after it said it was renegotiating its financing terms with banks after a sharp drop in business, and delaying publication of its annual earnings.
"I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly," said Thomas Cook group chief executive Sam Weihagen. The firm said in a statement that its banks, led by Barclays, HSBC, RBS and UniCredit, had agreed to the have agreed to provide a new £200 million facility until April 2013.
The deal replaces a £100 million short-term facility announced on October 21. Thomas Cook said the banks had also agreed "further relaxation of the financial covenants under the existing facilities", which would help it deal with "unexpected events and the effects of an uncertain economic environment."
Shares in the second biggest travel group in Europe after rival TUI had crashed 75 percent on Tuesday after the announcement that it was renegotiating financing terms, but later made up ground. Thomas Cook has suffered a disastrous year, leading to the resignation of its chief executive Manny Fontenla-Novoa in August. Plunging consumer confidence and turmoil in the Middle East and North Africa region, both popular areas with holidaymakers from France and Russia, have hit the company much harder than expected.
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