€200 million credit line in Spain for companies affected by Thomas Cook bankruptcy

By Dilip Kuner • Published: 28 Dec 2019 • 14:20

SPAIN’S national government has given the green light to a €200 million credit line for companies affected by the bankruptcy of tour giant Thomas Cook.

The Council of Ministers yesterday (December 27) authorised an agreement for the Official Credit Institute (ICO) to formalise financing and guarantee contracts.

It is intended to mitigate against cash flow problems caused by the bankruptcy of Thomas Cook.

This line of credit is also intended to avoid knock-on effects on suppliers.

Although in Andalucia the bankruptcy of the company has not had much impact, the hoteliers on the Costa del Sol will borrow more than €2 million from the credit line. Between January to July just 1 per cent of British tourists to the Costa del Sol and Andalucia used the services of Thomas Cook.

Minister of Tourism Reyes Maroto said that “this agreement completes the package of measures that the Government approved as a matter of urgency to meet the needs of the Spanish tourism sector as a whole, after the bankruptcy of Thomas Cook, a bankruptcy that impacted mainly in the Balearic and Canary Islands; with both regional governments we have signed agreements to develop actions that allow both the recovery of connectivity and the improvement and diversification of tourism in both archipelagos.”
This package of measures establishes a set of measures aimed at mitigating the negative consequences on the Spanish tourism sector and maintaining activity and employment.

Article four of the package instructs the Government to approve a line of financing of up to €200 million to meet the financial needs of those affected. Maroto said that this bankruptcy has meant the cancellation of more than 475,000 plane seats during the winter tourist season in the autonomous communities of the Canary Islands, Balearic Islands, Andalucia, Valencia and Catalonia, which are the most affected.

During 2018, the Thomas Cook group transported 1.3 million passengers to Spain. Its main destinations were the Canary Islands, with more than 800,000 passengers, representing 62 per cent of its share in Spain.