Thomas Cook shares plummet 70%

Thomas Cook’s share price has nosedived in early trading, with its value more than halving, after the group said it had been forced to open talks with banks to shore up its finances.

The tour operator's share price plummeted 72.9%, or 30p, to 11.5p, after the group announced it is seeking more capital following a slowdown in trading.

The group, which is reportedly considering the closure of around 200 travel agencies, said it is seeking to adjust the size of its debts in order to boost cashflow.

Last month the company's banks relaxed loan conditions and agreed to provide an additional £100m in short-term funds to the firm.

The group this morning cancelled the publication of its full year results, adding it will not release them until the discussions are concluded.

However Thomas Cook added it expects operating profit to be broadly in line with market expectations. The market is pencilling in a slide of around a third in underlying profits to £191m.

The group said: "As a result of deterioration of trading in some areas of the business in the current quarter, and of its cash and liquidity position since its year end, the company is in discussions with its principal lending banks with regard to its facilities during the seasonal low period of cash in the business," said the group.

"While the company currently remains in compliance with its financing covenants, it also intends to seek agreement from its lending banks to adjustments that will improve its resilience if trading conditions remain difficult."

Before this morning's sell-off Thomas Cook's share price was already down 78% for the year, according to Bloomberg.