Thomas Cook agrees £1.4bn refinancing package

Thomas Cook has announced a refinancing package worth £1.4bn ($2.3bn) which gives the troubled tour operator a further three years to repay its debts.

The company said the new arrangement gave it "greater financial flexibility" and "further stability".

Thomas Cook shares, which have slumped more than 80% in the past year, opened up 11% before slipping back.

Last year, the firm issued three profit warnings and was forced to take an emergency £200m loan.

"Today's announcement highlights the confidence our lenders have in Thomas Cook and we are delighted that they have demonstrated their ongoing support," said the group's chief executive Sam Weihagen.

"We continue to make good progress in strengthening the group's financial position, and our disposal plans, including aircraft sale and leaseback, are proceeding well."

'Advanced talks'

The refinancing package includes an £850m ($1.4bn) credit facility and the £200m ($323m) loan taken out in November last year. As part of the package, the interest rate on this loan will increase to 3.5%.

The operator also said it had completed its strategic review of the business, and would focus on reducing debt and strengthening its financial position by selling assets and addressing under-performing businesses, particularly in Canada, France and Russia.

It said it was in "advanced talks" over the sale and leaseback of between 17 and 19 aircraft.

Thomas Cook added it would continue its drive to turn around the UK business, and build on its "solid performance" in its German businesses.

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