Pressure mounts on Thomas Cook board

Thomas Cook will this week launch a publicity campaign aimed at reassuring customers as its new chairman, Frank Meysman, arrives to review the business, including an expected boardroom cull.

Friday’s refinancing saw the banks advance a new £200m revolving credit facility. Photo: Getty

 Following Friday night’s £100m bailout of the holiday group by its 17 banks, Thomas Cook will publish an open letter from interim chief executive Sam Weihagen to “the UK’s travelling public”.

It is designed as a riposte to a campaign by its major rival, Tui Travel, which sought to capitalise on the cash crisis at Thomas Cook that provoked a 30pc dive in holiday bookings last week.On Friday, Tui Travel placed full-page newspaper advertisements for its Thomson brand, with the strapline: “Another holidaycompany may be experiencing turbulence, but we’re in really great shape.”Mr Weihagen will hit back, beginning with considerable understatement “What a week it’s been...”, before stressing: “You can be sure that your holiday really is in safe hands with us.” He will play up the 170-year old company’s possession of the “most recognised and established name in the industry”.The plea to customers will coincide with Thursday’s arrival of former Sara Lee executive Mr Meysman, who is expected toconsult with shareholders livid at developments that have seen the shares crash to 18.02p, valuing the company at just £158m.While some recovery is expected on Monday, Tuesday’s shock announcement that the company needed a fresh cash injection just a month after receiving an extra £100m from its lenders sent the shares down 75pc in a single day. The company was also forced to postpone its full-year results, now expected in the week beginning December 12.Mr Meysman is likely to review the entire board, which ousted former chief executive Manny Fontenla-Novoa in August in the wake of three profit warnings, but has since failed to stem problems.Senior independent non-executive director Roger Burnell and the five other non-execs – David Allvey, Peter Middleton, Martine Verluyten, Bo Lerenius and Dawn Airey – are now all considered vulnerable.Meanwhile shareholders are questioning how finance director Paul Hollingworth oversaw a financial structure where a sudden trading downturn left the company facing a cash-flow crisis during the toughest time of its year.Friday’s refinancing saw the banks advance a new £200m revolving credit facility, replacing October’s £100m emergency loan, but at the price of giving up 4.9pc of the company’s equity.Mr Meysman is also under pressure to sell more assets than the £200m-worth currently on the block, cut around 1,000 jobs and possibly raise fresh equity.
Source:http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/8919286/Pressure-mounts-on-Thomas-Cook-board.html