TCG News12 Apr 2019 13:30
Alliance News
Review Says Thomas Cook May Have Breached Debt Limits "Inadvertently"
Fri, 12th Apr 2019 12:50
LONDON (Alliance News) - Thomas Cook Group PLC said Friday it may have "inadvertently" been in breach of its borrowing limits at periods in the past following a strategic review of the firm.
In early February, Thomas Cook launched an external strategic review of the travel firm which has since revealed that its "current interpretation and treatment" of debt limits outlined in its articles of association may have led to it "inadvertently" breaching these limits.
In its articles of association, the firm set a limit on the level of borrowings based on a multiple of adjusted capital and reserves of the firm. The articles were first outlined in 2007.
Thomas Cook emphasised that its level of borrowings, however, were "consistent with the credit rating and financial needs of the business."
"An implication of the possible technical breaches is that the company would be unable to roll-over existing credit facilities for the purpose of day-to-day treasury management, as it has done in previous years," Thomas Cook added.
Shares in Thomas Cook were 1.1% higher at 24.85 pence on Friday, down 80% over the last year.