Thomas Cook lengthens bank deal

by Jessica MCILHINNEY on July 18, 2011

Travel agent Thomas Cook today confirmed that it has plans to extend its banking facilities as it undergoes fundamental reviews of its activities.

The industry giant’s banking facilities – which involve a £200 million loan and a revolving credit arrangement of £850 million – were extended by a year to May 2014. Additionly, the interest margin on facilities has been brought down with immediate effect.

Thankfully, the margin over LIBOR has reduced to just over two and a quarter per cent and the credit facility has been reduced down to a rate between two and two and a half per cent depending on the proportion that is drawn, confirmed Thomas Cook in a statement to the market earlier today.  Previously, the margin was two and three quarter per cent for both of the facilities.

Paul Hollingworth, who is the Thomas Cook Group’s chief financial officer, commented that all those involved with the organisation are pleased that the term of their employer’s committed bank facilities have been reduced by a year, while the interest margin paid has also been reduced.

As stated in the recent trading update that was released, continued Hollingworth, we continue to perform incredibly well on cash flow with around £900 million of cash and committed facilities available. While it gets ready to enter its most important financial period since 2007, Thomas Cook is preparing sales of assets worth over £200 million.

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