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THOMAS COOK GROUP £1.6 BILLION CAPITAL REFINANCING PLAN
Following on from our announcement on 13 March 2013 that Thomas Cook Group plc ("Thomas Cook" or the "Company") was reviewing its capital structure, and taking into account the progress to date in transforming the business, the Board of Thomas Cook today announces a £1.6 billion capital refinancing plan (the "Capital Refinancing Plan"). The Capital Refinancing Plan comprises the following three inter-conditional financing elements:
· the raising of approximately £425 million gross proceeds from a fully underwritten placing and rights issue (the "Placing and Rights Issue"), comprising 87,591,241 Placing Shares at 137 pence per share (raising £120 million); and a 2 for 5 Rights Issue of 401,556,476 New Ordinary Shares at 76 pence per share (raising approximately £305 million);
· the raising of €525 million gross proceeds (approximately £441 million) from the issuance of new bonds maturing 2020 (the "New Bonds"), or if the New Bonds are not issued, utilisations under a fully underwritten bridge facility (the "Bridge Facility"); and
· £691 million of new facilities (the "New Facilities").
The Capital Refinancing Plan will:
· significantly reduce the proportion of debt funding of the Group's balance sheet;
· extend the maturity profile of the Group's financing arrangements;
· facilitate the implementation of the Group's Business Transformation which is expected to increase the generation of surplus cash flow with a view to deleveraging the Group, while providing a platform for the Group to resume dividends payments in the future; and
· deliver a strengthened capital base and financial position which is expected to improve the credit perception of Thomas Cook with suppliers and trading counterparties.
Thomas Cook has today also separately announced its results for the six-month period ended 31 March 2013.
Thomas Cook is also pleased to announce the appointment of Jefferies Hoare Govett as joint corporate broker alongside Credit Suisse with immediate effect.
The Placing and the Rights Issue are subject to the approval of Shareholders at the General Meeting to be held on 3 June 2013. An expected timetable of principal events is set out in Appendix I.
Credit Suisse and Gleacher Shacklock are joint sponsors and, together with Short Partners, are acting as joint financial advisers to the Company in relation to the Capital Refinancing Plan. Credit Suisse is the sole global co-ordinator and, together with Jefferies Hoare Govett, are joint corporate brokers on the Placing and Rights Issue. Members of the banking syndicate providing the New Facilities will be joint bookrunners in the proposed issuance of the New Bonds.
Harriet Green, the CEO of Thomas Cook, said:
"Today we are pleased to report improving financial results and announce important measures to strengthen our balance sheet. Earnings before interest and tax and gross margin are well ahead of last year and our cost out and profit improvement actions are going very well, allowing us to increase our target yet again. 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. We look forward to continuing the rapid transformation of the Group so that we fulfil the potential of the Thomas Cook brand for our customers, suppliers and employees."
Michael Healy, the CFO of Thomas Cook, said:
"I am delighted to be able to announce this fully underwritten and comprehensive £1.6bn refinancing of the Group. This successful synchronisation of a new bank facility, new bond issue and new equity issue, which reduces leverage and strengthens our liquidity profile, highlights a new found confidence in our business, not just within the business, but also confidence in the Group from our external stakeholders. The re-rating of our equity, bank debt and bonds is reinforced by S&P's and Fitch's upgrade confirmations as part of this refinancing.
We have significantly strengthened the financial management of the Group, with improved controls and reporting systems and substantial improvements in working capital management. The measures announced today set us on a firm footing for the future, enabling our continuing transformation of the company and bringing forward the time when we can return to paying sustainable dividends to our shareholders."
This summary should be read in conjunction with the full text of this announcement, including its appendices. Defined terms used herein have the meanings given to them in Appendix III.
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