Thomas Cook Group has agreed to the sale and leaseback of 17 Boeing 757-300 and 767-300ER aircraft with operating lessors Guggenheim Aviation Partners and Aircastle.
It expects to receive proceeds of $202.9 million from the sale of 11 757s and two 767s to Guggenheim, and proceeds of $91.5 million from the sale of six 767s to Aircastle.
Thomas Cook has also agreed in principle to enter into sale and leaseback agreements for a further two 767 aircraft with Guggenheim.
According to the request for proposal for financing (RFP), which was issued in April to the finance market, Thomas Cook was seeking five-to-eight-year terms on the 757s with Rolls-Royce RB211-535E4 engines and 767s with Pratt & Whitney PW4060 engines.
Market sources said, at the time, the RFP was viewed as a means for Thomas Cook to improve its balance sheet through the financings.
Thomas Cooks indicates the net cash proceeds of these transactions, which will be used for general corporate purposes, will add to its "headroom of cash and available facilities."
The leaseback arrangements will be treated for accounting purposes as finance leases.
Thomas Cook says the transactions will reduce the earnings of the group as a result of increased depreciation and the increase in finance costs in respect of the finance leases. This will be offset, to a certain extent, by a reduction in interest payable on borrowings.