- Lenders agree to boost existing credit agreement
- Will give firm room for manoeuvre over winter period
- £200m funding headroom will last until April 2013
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Struggling holiday giant Thomas Cook has been thrown a £200 million lifeline.
The debt-laden firm has announced that its lenders had agreed to amend its existing credit agreement, giving it room for manoeuvre over the quiet winter period.
The £200 million funding headroom has been approved by the company's syndicate of banks, which include Barclays, HSBC, RBS and UniCredit, and will last until April 30, 2013.
Saved: Struggling holiday giant Thomas Cook has been thrown a £200 million credit lifeline
This will replace the £100 million short-term facility announced on October 21, 2011.
Sam Weihagen, group chief executive at Thomas Cook Group, said he was 'absolutely delighted' that they had reached agreement with the banks so quickly.
The company, which sells more than 22 million holidays a year in the UK, had to turn to its banks for financial help following a deterioration in trade due to weak consumer confidence and unrest in North Africa.
Thomas Cook shocked both customers and investors when it revealed it had returned to its lenders for extra funding - just four weeks after it agreed a £100 million top-up.
The announcement saw shares in Thomas Cook dive 75 per cent and raised fears that millions could face holiday misery if the company collapses.
As well as the new loan, the company's banking group has agreed a further relaxation of the financial covenants under its existing credit facilities.
Surprise: Thomas Cook shocked both customers and investors when it revealed it had returned to its lenders for extra funding, just four weeks after it agreed a £100 million top-up
This will provide the travel company with extra headroom to deal with any unexpected events and the effects of an uncertain economic climate.
According to Thomas Cook Group, the company is striving to reduce its debt and reach a more appropriate capital structure.
Mr Weihagen said: 'I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly.
'Over the last few days, we have been overwhelmed by the messages of support from our holidaymakers, suppliers and partners and I would like to thank them for their good wishes and our employees for their hard work and dedication.'
Mr Weihagen said he was confident that the holiday company will pick itself up and survive this period of financial unrest.
'For over 170 years Thomas Cook has provided customers across the world with fantastic travel experiences. Today they can look forward confidently to holidays with us for many years to come,' he said.
