Thomas Cook shares in fur­ther nose­dive

The Daily Telegraph - Business - - Front Page - By Christo­pher Wil­liams

THOMAS Cook bat­tled to re­as­sure the City that it is not head­ing for an­other fi­nan­cial crunch, as more in­vestors bailed out and the shares were marked down by an­other fifth.

Chief ex­ec­u­tive Peter Fankhauser sought to calm nerves in pri­vate talks with in­sti­tu­tions al­ready nurs­ing heavy losses from last week, when Thomas Cook shocked the mar­ket with an early profit warn­ing. The shares nev­er­the­less fell by more than 21pc to 23.64p yesterday, their low­est level since 2012, shortly be­fore Thomas Cook was forced to call on share­hold­ers for cash in a rights is­sue to re­pair its tat­tered bal­ance sheet.

It means shares in the world’s first tour op­er­a­tor are down by more than four fifths in 2018 and by more than half in the last week alone. Thomas Cook has told share­hold­ers that de­spite its strug­gles this year as a re­sult of Bri­tain’s scorch­ing sum­mer, it has the fi­nan­cial strength to nav­i­gate the lean win­ter months. Last week it scrapped its dividend, worth £9m, and said it has head­room for covenant tests.

The con­sor­tium of 17 lenders be­hind Thomas Cook’s £1.4bn debt pile has waived covenant tests for the next two quar­ters based on sup­port for its up­dated busi­ness plan, agreed fol­low­ing an ear­lier profit warn­ing in Septem­ber. Mr Fankhauser is cam­paign­ing against the bear­ish views of the bro­ker Beren­berg, which last week branded Thomas Cook “un­in­vestable” and warned of the risk that an­other rights is­sue was “on the agenda”.

The com­pany’s de­ci­sion not to pro­vide per­for­mance guid­ance for the new fi­nan­cial year com­pounded fears that Brexit or more in­sta­bil­ity in pack­age hol­i­day des­ti­na­tions such as Turkey could tip it into a new cri­sis.

The tour op­er­a­tor has told an­a­lysts it does not face a short­age of liq­uid­ity as it did prior to its 2012 rights is­sue.

Peter Fankhauser, CEO, sought to calm nerves in in­vestor talks

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.