A payment firm in the Nordic area is in talks to extend the period for which it retains Thomas Cook Group's Scandinavian customers' cash from two days to several weeks, Sky News has reported.
"We remain in discussions with our Nordic card supplier and we are confident that we will reach an acceptable solution in the coming days," the group said in a statement.
Other credit card operators are reportedly exploring options to hold to as much as 50% of all payments processed on behalf of Thomas Cook Group for an unspecified time.
The moves put additional pressure on the cash-strapped travel group as it proofs that credit card acquirers are worried about its financial standing. Usually, companies extend the period for retaining customers' cash before transferring it to the vendor when they have doubts as to the business' solvency.
Several firms have also reportedly appointed Deloitte to perform an audit of their exposure to Thomas Cook Group.
On May 16, 2019, Thomas Cook Group reported a GBP1.5 billion pound (USD1.9 billion) pre-tax loss for the six months through March 31, although mostly due to a GBP1.1 billion pound (USD1.4 billion) goodwill impairment related to the 2007 merger with MyTravel Airways (Manchester International). The company's net debt has ballooned to GBP1.3 billion pounds (USD1.6 billion). Subsequently, analysts at Citi valued the group's equity at zero, prompting a share price plunge. However, other banks, such as Jefferies, reiterated a buy investment rating for the group.
EY also underlined that without a quick sale of its airline units, Thomas Cook Group might face "material uncertainty". The group has been exploring the sale of its airlines since February 2019. Thomas Cook's creditors offered to avail of a GBP300 million pound (USD380 million) loan facility to the group but only if it demonstrates substantial progress in the airline sale process.
"Following the announcement of the strategic review of our Group Airline in February, we have received multiple bids, including for the whole, or parts, of the airline business. As we assess these bids, we will consider all options to enhance value to shareholders and intensify our strategic focus," Group CEO Peter Fankhauser said in a quarterly earnings release.
In the six months through March 31, 2019, Thomas Cook Group's airlines posted a GBP81 million pound (USD103 million) operating loss. The group underlined that in general, the airlines remain a strong and profitable unit.
