£1.4bn lifeline for Cook jobs
Loan deal will safeguard future of city-based travel giant
HUNDREDS of staff at a leading Peterborough employer can breathe a sign of relief today after the firm was thrown a £1.4billion lifeline by its banks.
Bosses of travel giant Thomas Cook, which has about 1,600 staff at its headquarters in Bretton, have just put the final details to a three year deal with its banks that is expected to secure the firm’s future.
The deal has been thrashed out with about 17 banks, which included Barclays and the RBS.
News of the deal comes seven months after the 171-year-old company was on the verge of running out of cash and had to call on its banks for a £200 million loan.
A Thomas Cook spokesman said: “This is a very significant deal for Thomas Cook.
“It means that any concerns for the future that staff may have had can be put away.
He added: “It means the future is looking fine for the long term.”
In a statement, Sam Weihagen, group chief executive for Thomas Cook, said: “This announcement highlights the confidence our lenders have in Thomas Cook and we are delighted they have demonstrated their ongoing support.
He added: “We continue to make good progress in strengthening our financial position.”
He said plans to sell some assets including HCV Hotels, its Indian business and the proposed sale and leaseback of its aircraft were an important step.
Mr Weihagen said: “These will ensure Thomas Cook continues to provide customers with wonderful travel experience for years to come.”
Afterwards a spokesman for the TSSA union, said: “We are really pleased that Thomas Cook has now secured a long term financial agreement that will ensure its return as a major player in the travel industry.
“We hope that this will be the start of a new chapter after the disastrous management style of former chief executive Manny FontenlaNovoa who took ridiculously large rewards for bringing the company to its knees.
He said the new deal would help safeguard the jobs of hundreds of people who worked for Thomas Cook.
At the start of the year, Thomas Cook revealed that Mr Fontenla-novoa received a £1.17 million payout from the company after he resigned.
He stepped down in August last year, weeks after the company had issued its third profits warning for the year and which saw its share price drop by about 30 per cent.
In February, the firm announced a £91 million underlying loss from its operations for the last three months of 2001.
It blamed rising fuel costs, trouble in North Africa and a drop in bookings for its financial woes.
Peterborough MP Stewart Jackson raised the firm’s plight in the House of Commons prompting Prime Minister David Cameron to pledge that Business Secretary Vince Cable would be asked to report on the firm.
Thomas Cook shares closed at 21p on Friday; a year ago they were worth more than 170p.