Travel advice Thomas Cook

Travel advice update: Thomas Cook may be in trouble, because majority shareholder Arcandor, is said to need to refinance €720 million of debt by a deadline of June 12 and chief executive Karl-Gerhard Eick has admitted state aid was the only option to stave off insolvency which could happen within weeks.

A resolution to the financial crisis hitting Thomas Cook’s German parent Arcandor is expected by June 18 when the retailer reveals its second quarter results.

Arcandor has warned there is an imminent threat of insolvency if it is not granted €60million in German state aid it has asked for.

If it does not receive the help city analysts are expecting, Arcandor might be forced to sell its 52% stake of the FTSE 100 listed Thomas Cook plc.

But Arcandor’s “patchy profitability track record” could mean it does not meet criteria for state aid. Charles Stanley concluded it would expect a resolution by June 18.

The German firm has insisted Cook remains an important part of its future strategy and that a sale would be the last thing it would consider.

The uncertainty surrounding the fate of Arcandor has caused its share price to plummet in recent months.

However, after German finance minister Peer Steinbrueck confirmed the request for state aid was being “seriously considered” yesterday shares in Arcandor rose the most since March.

Yesterday stockbroker Charles Stanley, while issuing a “hold” recommendation on Cook shares, said a sale of the UK operator would be a last resort.