Thomas Cook's share price has bounced back from this week's lows – a sign, perhaps, that a deal is in the offing with its lenders
David Cameron called Thomas Cook 'an important and iconic British brand', suggesting the politics of the debt-laden travel operator's situation is becoming as important as the financing. Photograph: David Sillitoe for the Guardian
The share price of Thomas Cook is behaving as if a deal with the banks is about to be struck. It's up 17% this morning to 19p. That's still miles away from the 41p at which the shares started the week, and a continent away from the 200p at which they started the year. But the expectation is that the banks will do something soon – maybe later today.
Why? First, the prime minister seemed to drop a hint on Wednesday that he'd like to see action. David Cameron said Thomas Cook was "an important and iconic British brand" and that he had "obviously" asked the Department for Business for a report on the situation. Possible translation: Thomas Cook (15,000 employees in the UK; short-break operator for next year's Olympics; RBS and Lloyds among the lenders; Civil Aviation Authority licence) could develop into a serious political headache, so please get this sorted out. Do not underestimate the political factor: the bankers are not.
Second, Thomas Cook's major rival is twisting the knife, albeit elegantly. Thomson has full-page ads in a few national papers today with the copy-line: "Another holiday company may be experiencing turbulence, but we're in really great shape." It would best for Thomas Cook and its banks to try to kill such talk asap – confidence is everything.
Third, as is widely acknowledged, it could be self-defeating for the banks to play hardball at this time of the year, the moment of maximum strain on the company's cash flow. This argument is not as strong as it sounds since the banks have to be satisfied that Thomas Cook does indeed need "only" another £100m to get over its winter hump in cash flows and that a downturn in trading in France and Russia is the sole source for the deterioration in finances in the past month......................."
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