Thomas Cook has announced a £1.6 billion capital refinancing plan to cut down on its debt.
Thomas Cook has outlined a £1.6 billion plan to refinance and significantly cut down on debt financing on their balance sheets. The second goal of this refinancing is to facilitate its Business Transformation. This of course will improve its financial position and credit perception.Harriet Green, group chief executive, highlights the benefits of the plan: "Our progress transforming the business also enables us to undertake our capital refinancing plan. This will reduce the very significant debt that we inherited, lengthen its repayment profile and consequently help us deliver the full benefits of the strategic plan we set out in March".There are three elements to this plan. First, the company seeks to raise £425 million in proceeds from issuing rights. A further €525 million in gross proceeds will be raised from issuing of bonds, to mature in 2020. Finally, £691 million will be invested in new facilities.The placing and rights issuance are subject to the approval of Thomas Cook's shareholders, to be confirmed in June.
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