Thomas Cook Shares Slump as Losses Mount 

(Bloomberg) -- Thomas Cook Group Plc’s crisis deepened as the debt-laden travel giant warned of another tough summer and said it will get a 300 million-pound ($385 million) rescue loan only if it makes progress in selling its airline.

The stock fell to its lowest since 2012 Thursday and the bonds hit a record low after Cook posted a 1.1 billion-pound writedown at a U.K. arm hurt by the Brexit saga. Net debt jumped 40% and earnings in the second half, the high season for travel, are set to fall even compared with a disastrous 2019 that kicked off a liquidity crunch.

Chief Executive Officer Peter Fankhauser warned that the world’s oldest travel firm is grappling with an uncertain environment across all markets. Last year’s European heatwave undermined demand for “winter-sun” holidays, while British customers are continuing to delay travel plans and bookings from Germany have weakened, according to the London-based company.

Fankhauser said there have been multiple bids for all or part of the airline business, some of them “credible,” while declining to discuss how much the 100-plane operation might raise.

The shares fell 22%, the most since Nov. 27, dropping to their lowest since November 2012 before trading down 15% at 19.46 pence as of 8:08 a.m. in London. Cook has lost more than a third of its worth this year after tumbling 75% in 2018, reducing its value to 306 million pounds.

Bond Slump

The firm’s 750 million euros of notes maturing in June 2022 plunged 12 cents to record low of 55 cents on the euro, data compiled by Bloomberg show.

The U.K. writedown reflects the impact of challenging trading in the first half, and its application to the business plan for the business “taking into account severe but plausible scenarios,” the company said.

Deutsche Lufthansa AG, Virgin Atlantic Airways Ltd. and Ryanair Holdings Plc are among potential bidders for the airline business, according to reports. Fankhauser said he’ll consider “all options to enhance value to shareholders.”

The new loan is available for nine months from October. As a secured facility it will rank ahead of existing debt, meaning there would be fewer assets available to other creditors in case of an insolvency. Cook also won waivers from existing lenders on March credit tests.

Net debt jumped to 1.25 billion pounds at the end of March from 886 million pounds a year earlier as the company ran short of working capital amid dwindling bookings. It has tapped 609 million pounds from an existing revolving credit facility, up from 50 million pounds.

Bookings for the coming summer are down 12%, though Cook said that partly reflects capacity cuts it has made to help bolster prices. Airline bookings in turn are 6% lower.

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