Thomas Cook Group PLC New £200m bank facility (8646S)

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RNS Number : 8646S

Thomas Cook Group PLC

28 November 2011

25 November 2011

Thomas Cook Group Plc

Amendment to existing bank facilities and new GBP200m bank facility signed

Thomas Cook Group is pleased to announce that we have reached agreement with our banking group to provide the Group with a new facility that significantly improves the robustness of the Group's financial position.

Our banks, led by Barclays, HSBC, RBS and UniCredit, have agreed to provide a new GBP200m facility available until 30 April 2013, which replaces the GBP100m short-term facility announced on 21 October 2011. In addition, they have agreed a further relaxation of the financial covenants under the existing facilities. This provides the Group with much increased headroom to deal with unexpected events and the effects of an uncertain economic environment.

As previously announced, the Board is taking steps to reduce the Group's debt and reach a more appropriate capital structure over time. The Group will also undertake a strategic review.

The Group will announce its preliminary results for the twelve months ended 30 September 2011 during the week commencing 12 December 2011.

Sam Weihagen, Group Chief Executive, Thomas Cook Group plc said:

"I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly. Over the last few days, we have been overwhelmed by the messages of support from our holidaymakers, suppliers and partners and I would like to thank them for their good wishes and our employees for their hard work and dedication. For over 170 years Thomas Cook has provided customers across the world with fantastic travel experiences. Today they can look forward confidently to holidays with us for many years to come."

Enquiries:

   Thomas Cook Group plc        Investor Relations          [phone] 
   Finsbury                                  Faeth Birch                    [phone] 

Notes to the Editors:

The new GBP200m revolving credit facility recognises the Group's seasonal working capital patterns. The facility has the benefit of a limited security package over shares. It will be available to the Group until 30 April 2013. The initial interest margin over LIBOR payable on the new facility will be 5% per annum, increasing by 0.50% per annum each quarter. In addition, a commitment fee and, in certain circumstances, a utilisation fee is payable.

The existing credit facilities comprise a GBP150m amortising term loan and a GBP850m revolving credit facility which mature in May 2014. The interest margin on these facilities remains unchanged.

The banks will be issued warrants to subscribe 42,914,640 new ordinary shares of the Company (representing 4.9% of the issued share capital of the Company) exercisable at a strike equal to the average closing price for Friday 25 November 2011 and Monday 28 November 2011, at any time until 22 May 2015.

In addition, the covenant levels on the existing and new facilities have been further relaxed as follows:

-- Leverage covenant: the ratio of consolidated adjusted net debt to leverage EBITDAR must be less than or equal to 5.0x for the testing period ending in December 2011, 4.75x for the testing period ending in March 2012 and 4.5x in respect of all subsequent testing periods

-- Fixed charge cover covenant:the ratio of fixed charges to fixed charge EBITDAR must be greater than 1.5x.

These relaxed financial covenants will continue to be tested at the end of each calendar quarter on a rolling twelve month basis. The revised covenant levels apply until 31 March 2013 at which time they will revert to the original covenant levels.

The Group has agreed to a number of other additional restrictions including no new share or business acquisitions, a limit on capital expenditure and, as previously announced, a prohibition on dividends and share buy-backs.

The arrangement and participation fees with respect to the new arrangements will cost circa GBP10m.

In addition to the existing term and revolving facilities the Group has GBP200m of committed bilateral bonding and guarantee facilities provided by seven banks that are covered by the new amended agreement, which is unsecured and principally for consumer protection.

This information is provided by RNS

The company news service from the London Stock Exchange

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