November 23, 2011- Thomas Cook, the UK travel company, says that business is as usual. The company’s stock lost 75% of its value on Tuesday and travelers may be skeptical about booking future trips with the company. The 170-year old company has been going through a huge financial crisis due to dismal sales since last winter. Cook is trying to gain financing and revising its current loan terms.
Last month a group of 17 banks relaxed loan conditions on over $2.5 billion of existing debt. The company says current talks with lenders could take as long as six weeks, but it feels lenders will be supportive of what it needs. In early trading in London on Wednesday, the stock had increased by more than 25%. The stock has lost more than 93% of its value during 2011.
Analysts were worried that many travelers will not have the confidence to book travel with the company. Hotels and suppliers will also be worried about Cook’s credit situation and this could give its competitors even more of an opportunity to gain market share.
The company dates back to 1841 with English railway journeys and was formed through a merger in 2007. Sales in 2010 were over $13 billion and the company has 30,000 employees and more than 22 million clients. The company was due to announce its earnings report but decided to hold off until after its talks with lenders.