Thomas Cook Regulatory News (TCG)

21 October 2011

Thomas Cook Group Plc

Amendment to existing bank facilities and new £100m bank facility signed

Further to our statement on 29 September 2011, we are pleased to announce that we have reached agreement with our banking group to amend the terms of our existing bank facilities to increase financial flexibility for the Group. In addition, we have signed a new short-term committed bank facility to provide an additional £100m of headroom around the seasonal cash low point at the end of December this year.

The existing credit facilities comprise a £150m amortising term loan and a £850m revolving credit facility which mature in May 2014. The terms have been amended to provide additional headroom for the Group as outlined below:

·; Leverage covenant: adjusted net debt must be less than or equal to 4.5 times leverage EBITDAR at the end of December 2011 and less than or equal to 4.25 times leverage EBITDAR thereafter;

·; Fixed charge cover covenant:fixed charge EBITDAR must be greater than or equal to 1.75 times fixed charges.

The financial covenants continue to be tested at the end of each calendar quarter on a rolling twelve month basis. The revised covenant levels apply until March 2013 (or sooner, if the term loan is repaid and we are able to confirm that we can meet certain covenant tests), at which time they will revert to the original covenant levels.

Paul Hollingworth, Group CFO commented: 

"We are pleased to have the full support of our banking group in amending the financial covenants so as to provide greater financial flexibility, particularly around the seasonal cash low point at the end of December."

Enquiries:

Thomas Cook Group plc Investor Relations +44 (0) 20 7557 6414

Finsbury Faeth Birch +44 (0) 20 7251 3801

Notes to the Editors:

The original covenant levels were set when the facilities were agreed in May 2010, but since then, as a result of adverse trading conditions caused by, amongst other factors, the impact of the volcanic ash cloud, political unrest in the MENA region, and underperformance of the UK business, the headroom under the covenants has been reduced.

The original covenant levels were as follows:

·; Leverage covenant: adjusted net debt must be less than or equal to 3.75 times leverage EBITDAR

·; Fixed charge cover covenant:fixed charge EBITDAR must be greater than 2.0 times fixed charges.

In return for these covenant amendments, the interest margin over LIBOR payable under the facilities will increase by 50 basis points, broadly reverting back to the level prior to the reduction in margin agreed with the banking group in July 2011. In the event that the additional headroom under the covenants is required for any quarterly covenant test until March 2013, then the interest margin would be increased by a further 75 basis points. This increased margin would apply until the original covenant levels are complied with.

The new £100m short-term bank facility recognises that the Group experiences a significant working capital swing between September and December each year and will contribute additional headroom during December 2011 and January 2012.

The Group has agreed to a number of other restrictions including a limitation on acquisitions and a prohibition on dividends and share redemptions. These restrictions apply until the Group has repaid the £150m amortising term loan and is able to confirm that it can meet certain covenant tests. The Group has also agreed to use the proceeds of any disposals to repay the term loan.

The amendment fees with respect to the new arrangements will cost circa £5m.

In addition to the existing credit facilities the Group has £200m of committed bilateral bonding and guarantee facilities provided by seven banks that are covered by the amendment agreement.