Thomas Cook in debt-crisis, down 4%

Thomas Cook has shed 4% at Rs 38.20 in morning trades after its parent company, Thomas Cook Group plc, announced that it is in talks with banks for increasing its borrowings to tide over a challenging financial situation within the group.

Beleaguered tour operator Thomas Cook Group plc said it had instigated fresh talks with its banks after a further deterioration in its trading performance and cash position left it in danger of defaulting on the terms of its borrowing.

The UK-based company said its current strained finances was partly due to the winter season, which is the weakest time of the year for travel business.  The Arab Spring and Euro Zone crisis has only further crippled its business as consumers travelling to these regions have postponed their travel plans.

The largest chunk of the companies business comes from UK, Ireland, India and Middle East that accounts for 35 per cent of its £9 billion annual revenues.

However, despite the financial strain the company is now facing, Thomas Cook's interim chief executive Sam Weihagen insisted that “business was robust with a great future.”

The scrip opened at Rs 38 and has, so far, touched that day's low at Rs 37.15. Around 243,863 shares had changed hands at the BSE counter till 1020 hours.