Thomas Cook has been given the lifeline that it sought.

The recent £100m loan has been withdrawn and has been replaced by a £200m facility offered by a syndicate of 17 banks. The company will thus have the extra working capital that they require in the run-up to the northern hemisphere summer season.

In exchange for  the extra money Thomas Cook gives up much control over their strategy.  The new credit deal is conditional on more incisive disposal of assets and the company must undertake a strategic review.  They further agreed to limits on capital expenditure, an agreement not to buy shares or acquire any further businesses, a prohibition on dividends, and no further share buy-backs are permitted.  (They squandered £290m of cash in 2008 buying their own shares.  By way of comparison, the whole company was valued at under £100m in November 2011, after the shares crashed.)

The banks will receive also an option to purchase 4.9% ownership of the company at current prices, and the fee cost for the new deal is £10m.  They will be paying 5% interest on the new loan, which will increase by half a percent for every quarter that the loan runs.  The facility will run until 30 April 2013, by which time they will be paying as much as 8% on the interest.

The liabilities of Thomas Cook currently include £1.1bn owed to banks, aircraft lease agreements of around £800m and £700m of bonds.

According to Sky News, Thomas Cook abandoned a proposed £400m rights issue that was to have been announced on 24 November, along with their annual results.  The subsequent collapse of their share price in all probability means that this is no longer an option.