Thomas Cook Group Plc, said it will borrow another 100 million pounds, easing fears about the future of the world's oldest travel company, whose shares crashed earlier in the week when it asked its banks for new funding.
The 170-year-old company said its banks, led by Barclays Plc, HSBC Holding Plc, Royal Bank of Scotland Group Plc and UniCredit SpA, had agreed to provide a new 200 million pounds facility available until April 2013, which replaces the 100 million pounds short-term facility announced in October.
The banks have also agreed to relax the terms of an upcoming key test of its financial health, Europe's second-biggest travel company said on Friday.
This provides the group with much increased headroom to deal with unexpected events and the effects of an uncertain economic environment, the company said in a statement.
Thomas Cook shares, which had lost 94 percent of their value since the start of the year, fell 75 percent on Tuesday when it asked lenders to come to its rescue for the second time in five weeks. The stock closed 10 percent higher at 18.02 pounds on Friday.
I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly, Acting Chief Executive Sam Weihagen said in a statement.
Thomas Cook has been hit hard by tough trading conditions, especially in Britain, where its core customer base of families with young children has been particularly affected by tough economic conditions. It was also hit by unrest in popular destinations such as Egypt, Tunisia and Morocco.
(Reporting by Matt Scuffham; editing by Andre Grenon)