Thomas Cook shares plummet as company meets with banks

THOMAS COOK is teetering on the brink this morning following the news that it is in talks with banks over how much it can borrow. Shares in the travel company plummeted 70 per cent at one point after it confirmed in a statement it was renegotiating its finances for the second time in a month.

Thomas Cook has been hit hard by cancellations of holidays to North Africa amid political unrest in the region. Its French and Russian business have fared particularly poorly, with French people avoiding Tunisia and Russians putting off trips to Thailand because of floods there.

"The company is in discussions with its principal lending banks with regard to its facilities during the seasonal low period of cash in the business," Thomas Cook said.

It insisted it was in compliance with its banking covenants but said it would delay publishing its results, which had been due this Thursday, until it has come to an agreement with its banks.

The Wall Street Journal points out that Thomas Cook has reduced its profit expectations three times in the past 18 months and has still not found a replacement for its former CEO, Manny Fontenla-Novoa, who left the company in August.

There are fears, as Guardian web editor Jonathan Haynes points out on Twitter, that Thomas Cook's troubles will be compounded by the reaction of travellers who might avoid booking holidays with the company in case they go bust - although customers' money is protected by the Atol scheme. ·