Leisure and travel specialist Thomas Cook’s shares tumbled nearly 70 per cent on the London Stock Exchange on Tuesday as it announced it was in talks with banks to increase its borrowings to tide over a challenging financial situation within the group. The group already has a £900-million debt on its books and is seeking a further £200 million from banks.
Despite the financial strain the company is now facing, the company insisted that business was robust with a great future. The company's current strained finances were partly due to the winter season, which is the weakest time of the year for travel business. The Arab Spring and euro zone crisis has only further crippled its business as consumers travelling to these regions have postponed their travel plans. The largest chunk of the company's business comes from the UK, Ireland, India and West Asia that accounts for 35 per cent of its £9-billion annual revenues. The group was now looking at various parts of its businesses and would consider selling off some of its non-core business if it would help in tiding over the current crisis. Apart from its core business of travel and leisure, the company also has its own fleet of aircrafts and is also into travel finance and insurance businesses.
Deterioration of trading in some areas of the business in the current quarter, and of its cash and liquidity position since its year end, it is in discussions with its principal lending banks with regard to its facilities during the seasonal low period of cash in the business. While the company currently remains in compliance with its financing covenants, it also intends to seek agreement from its lending banks to adjustments that will improve its resilience if trading conditions remain difficult.
| Company Name | CMP |
|---|---|
| IRCTC | 832.40 |
| Transcorp Intl. | 33.48 |
| Thomas Cook (India) | 217.80 |
| TBO Tek | 1539.15 |
| Le Travenues Techno | 142.45 |
| View more.. | |
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