Don't Just Book It, Thomas Cook It!


Thomas Cook has been around for 170 years, but it is going through a very uncertain time as it attempts to renegotiate its debt with its bankers.  Its share price fell 75% in trading yesterday.

My Corporate Finance class will soon learn that some of the major costs associated with debt are the costs of financial distress.  The publicity surrounding its debt difficulties will not be good for Thomas Cook.  Its managers will have their attention diverted from managing the business to dealing with creditors.  Its best employees may try and jump ship (excuse the pun!).  It will be unable to finance new profitable holiday packages.  But most of all, who will want to book their honeymoon or summer holiday with a company that may not be around in a few months?   
  


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