Thomas Cook says approve plans or risk administration

Thomas Cook has issued a warning to its shareholders that if its planned disposals are not approved it may risk administration.

If the plans to sell and leaseback part of its aircraft fleet and sell five of its Spanish hotels are not approved by the shareholders at a General Meeting on 29 May in London, Thomas Cook’s recent deal to secure its £1.4 billion debt with its banks could be jeopardised.

Losses of £262.7 million were reported at Thomas Cook between September 2011 and March 2012, which the firm attributed to low trading at its North American and French operations.

Thomas Cook had to go to its lenders in November to request a further £100 million of cash. The move inspired rumours of an oncoming failure for the business, which issued three profit warnings last year.

Responding to the situation a spokesperson said: “Thomas Cook is doing just fine and our customers’ holidays are completely safe. Our banks have been very supportive and we have a new, flexible three-year banking deal in place. We fully expect the hotel sale and the sale and leaseback to go ahead as planned.”

Its plans to return to profits involve running fewer and higher quality hotels as well as encouraging more online bookings.

Read our previous story on Thomas Cook announces new bank deal prior to sale of assets.

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