Thomas Cook shares dive 50%

SHARES in package holiday giant Thomas Cook nose-dived 50% today
after it said it was in talks with its banks after a further slump in trading and cash position.

Thomas Cook, which recently entered a joint venture with The Co-operative Group for its travel agency business, has issued a string of profit warnings over the last year, which led to the departure of its chief executive in August.

The group, Europe’s second largest travel firm behind TUI only struck a deal with its banks in October to relax the terms of its lending but has now asked them to consider a further amendment after trading continued to decline.

“The company is in discussions with its principal lending banks with regards to its facilities during the seasonal low period of cash in the business,” Thomas Cook said.

“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.”

Thomas Cook said it would delay publication of its full-year results, originally due on Thursday, until the discussions are concluded. It said it expected its full-year operating profit to be in line with previous guidance.