Thomas Cook sees shares boost

The world's oldest travel firm Thomas Cook shares jumped 13.5% on Tuesday after it confirmed it was close to securing a fresh deal with its banks that will give the struggling company at least three years more breathing space. The company's shares, which have lost almost 90% of their value over the past year following a string of dire profit warnings, closed up 2.8p to 23.25p after it confirmed that its lenders had agreed to extend £1.2bn of loans until 2015 . However, the agreement comes at a heavy cost with Thomas Cook's lenders taking a 5% stake in the business as well as collecting a hefty penalty charge of a couple of per cent of the value of the deal. Thomas Cook said the talks with its consortium of 17 lenders, including state-backed Royal Bank of Scotland, were "advanced". Sources close to the deal said they expected to receive the final sign-off from some of the smaller lenders later this week. It comes just months after the banks pumped in £200m of emergency funding before Christmas. Thomas Cook, which traces its roots back to 1841 when 31-year-old cabinet maker Thomas Cook charged one shilling a head for his first railway excursion from Leicester to Loughborough , is also "exploring a possible sale and leaseback" of some of its aircraft. The sale of 20 aircraft could net the struggling business £150m. The travel firm is also close to selling its 77% stake in Thomas Cook India for about £110m-120m. Its stake in Nats, the air traffic control group, is also on the block as it desperately looks for a way to pay down its £890m of debts. Analysts believe it could also be forced to sell off its German airline, Condor, or its Scandinavian division. Thomas Cook, Europe's second-biggest travel firm behind rival Tui Travel, has been in dire straits since last summer when it announced its third profits warning in 12 months and Manny Fontenla-Novoa, its chief executive, resigned with a £1.17m pay off . Fontenla-Novoa has collected total pay of £17.2m over the past five years, while the company's market value collapsed from £2.3bn to £180m. The latest warning came just days ago, when the company announced a 10% fall in bookings for package summer holidays to the Canaries and Balearics – its core market.