The chief financial officer of Thomas Cook has confirmed his departure, one day after the debt-laden tour operator announced it had agreed a new financing package with its lenders.
Paul Hollingworth, who has been at Thomas Cook for two years, will step down at the end of June, the group said on Wednesday. He will be replaced by Michael Healy, formerly group financial director of Kwik-Fit.
The group also searching for a new chief executive, following the departure of Manny Fontenla-Novoa in August.High quality global journalism requires investment. Analysts said the financing deal would give Thomas Cook breathing space, but that the challenge of restructuring the group remained.
It is the third refinancing within a year for the 171-year-old Thomas Cook and extends the maturity of £1.4bn of finance facilities by a year to May 2015. The company also secured more relaxed financial covenants as part of the deal, agreed with a syndicate of 17 lenders led by the Royal Bank of Scotland and Barclays, and will not have to make an interim payment next year.
Sam Weihagen, interim chief executive, said the move demonstrated “the confidence our lenders have in Thomas Cook”.
However, the interest rate on all of the amount except a £200m liquidity facility will rise from 2.75 per cent to 3.5 per cent over Libor, the interbank lending rate, and the group must also pay a £14m amendment fee.
“It has come at a price, but it does give them a much firmer financial footing,” said Wyn Ellis, analyst at Numis Securities.
Also on Tuesday, Tui Travel said it expected trading this summer to be in line with expectations, but profits in the six months to March 31 were dented by lower-than-expected demand for north African destinations and the effect of severe flooding in Thailand last year.
Tui had done well to focus on offering “differentiated and exclusive” products – costlier packages with higher quality hotels and restaurants, analysts said.Travel operators have come under increased pressure in the past 18 months as customers shun popular tourist destinations such as Egypt and Tunisia due to political upheaval in the region, or cut back on foreign trips because of weaker consumer sentiment.
Tui, Europe’s largest tour group by market share, which operates under the Thomson and First Choice brands, said it had ended the winter in line with expectations, with revenue up 5 per cent to £5.4bn in the six months to March 31.
Tui’s operating loss increased to £317m, compared with £307m for the same period last year. The group’s pre-tax loss widened from £366m to £457m.One of the sharpest declines was registered in Tui’s French business, where the operating loss jumped from £39m to £61m. It attributed this decline to weak consumer sentiment but also the diminished appeal of north African destinations such as Tunisia, which are traditionally popular with French tourists.However, the group’s confidence was bolstered by a resilient performance in its UK and Irish markets, where the operating loss for the period narrowed to £125m, down from £173m, boosted by an early Easter.