Thomas Cook shares have gone into freefall following news that it is in talks with banks to ensure it has enough cash to see it through to the end of the year.
The news that the company was delaying the release of its full year results while discussions with its bankers are ongoing stunned the city and shares immediately plunged more than 50%, wiping out half of the company's value. They have since continued to slide and are currently down 75%.
Cook said there had been a deterioration of trading since October and it needed to ensure it had enough cash in the bank to see it through the winter lull. Seeking to reassure the market, the company stressed that it still expects to report a headline operating profit for the year ended September 30 of £320m, in line with previous guidance, but it has been unable to stop the slide in its share price.
Cook said it is currently not in breach of the terms of any of its loans. It said it wanted to "improve its resilience if trading conditions remain difficult".
Only last month, Thomas Cook arranged a new £100m credit agreement with bankers to help with cashflow, but this morning chief financial officer Paul Hollingworth said it was seeking a further £100m from lenders as a "prudent" measure . If agreed, the loan would push Cook's net debt to close to £1bn.