Thomas Cook Plots Â£400m Share Issue

By Mark Kleinman, City Editor

Thomas Cook, Britain's biggest tour operator, is drawing up plans to tap shareholders for more than £400m in a bid to secure the company's long-term future.

I can reveal that Thomas Cook is working on the equity-raising alongside a wider overhaul of its capital structure that will include new long-term borrowing facilities with its lenders.

The news, which is expected to be announced in the coming weeks, will be designed to restore investor confidence in one of the most prominent names on British high streets less than a year after a deal with its banks hauled it back from the brink of collapse.

Last week, Thomas Cook's new chief executive, Harriet Green, announced plans to axe 2500 jobs in its UK operations, which have been hit hard by competition from internet travel agents. Nearly 200 high street outlets are closing as part of the changes.

People close to Thomas Cook said the financial restructuring would follow details of a renewed focus for the company that will be announced by Ms Green alongside a trading update tomorrow. The strategic review is likely to include pruning a number of the group's brands as well as sell non-core assets such as its stake in National Air Traffic Services, the organisation responsible for controlling Britain's commercial airspace.

Other businesses that analysts have speculated will be sold include Neilson, its skiing business, Elegant Resorts, its upmarket travel agent, and Gold Medal, a long-haul specialist.

Insiders said it was unlikely that Thomas Cook would announce details of any of the disposals tomorrow.

The capital-raising that will be revealed in the coming weeks is expected to take the form of a share placing rather than a more conventional rights issue, and will aim to make a significant dent in Thomas Cook's £800m debt-pile. The plans remain subject to change, insiders said today.

Under stock exchange guidelines, companies can place up to 10 per cent of their market capitalisation without requiring the approval of shareholders, although if it confirms plans to raise more than £400m - a figure equivalent to roughly half its current £754m market value - it would require investors' consent.

"The deal will take the issue of the company's financial future off the table," one person familiar with Thomas Cook's plans said.

The equity placing and broader overhaul of the company's capital structure are being worked on by Credit Suisse, the investment bank that is Thomas Cook's retained financial adviser.

Details of the overhaul of Thomas Cook's other financing facilities were unclear on Tuesday, although it is likely to include reworked debt facilities that replace a 400m euro bond that is due to mature in 2015.

Ms Green's comments tomorrow about the future of Thomas Cook will be closely-watched by the City. She joined last year from Premier Farnell, a distributor of electronic components, where she was credited with an acceleration of the growth in revenues derived from digital channels.

Thomas Cook, which reports results for the first half of its financial year in May, describes itself as the oldest and best-known name in leisure travel, with sales of £9.5bn last year, more than 30,000 employees and 23 million customers.

Last November, it revealed a £590m loss for the year, a figure exacerbated by goodwill and other writedowns valued at £369m.

Analysts at Morgan Stanley predicted that a capital-raising would be on Ms Green's agenda in December.

"The company's own 'fiscal cliff' is in 2015 when the £1.2bn bank facilities (May) and the 400m euro bond (June) mature. It will need to have financing in place for these by September 2014 at the very latest in order to be audited as a going concern," they said.

"Prudence would suggest the company starts a year early, so we think management could think about raising capital in 2013, ideally not too soon after the Spring strategic review. We think an equity raise is the most logical route as the debt level needs to be reduced."

It is understood to have deliberated for months about the UK shop closures and job losses disclosed last week. Peter Fankhauser, the head of Thomas Cook's Continental Europe & UK division, said when the news was announced:

"It is never easy to make decisions that impact directly on our people, but we also owe it to our customers to shape the business effectively and ensure that, when they book their holiday with us, our administrative costs are as low as possible.

"As we improve and develop our online capabilities, maintaining a strong presence on the High Street is an important part of our omni-channel strategy. Even after these changes we will still have one of the largest retail networks in UK travel."

A spokeswoman for Thomas Cook said that a capital-raising would not be announced tomorrow but said she could not comment on "speculation" about such a development in future.

Anda sedang membaca artikel tentang

Thomas Cook Plots Â£400m Share Issue

Dengan url

http://kerjasendirianda.blogspot.com/2013/03/thomas-cook-plots-a400m-share-issue.html

Kerja Sendiri