Thomas Cook shares jump on news of financing talks
Shares in Thomas Cook closed 13% higher after it confirmed it was in "advanced" talks about extending financing arrangements.
The discussions are part of the strategic review that the firm began after new financing was put in place last November.
Thomas Cook also said it was also exploring the possible sale and leaseback of certain aircraft.
Recently it said summer bookings were below last year's but were improving.
Shares in its Thomas Cook India unit were up more than 8% in Bombay trading after a newspaper reported the parent company was in talks to sell its 77% stake as part of its strategic review.
At the weekend, the Sunday Times reported that Thomas Cook was close to securing financing of £1.2bn from its lenders.
The 170-year-old company's banks include Royal Bank of Scotland and Barclays and a deal would give the company space to reorganise its business.
Last year, Thomas Cook issued three profit warnings and was forced to take an emergency £200m loan.
'Too much debt'
Analyst reaction was mixed, with some seeing the announcement of the talks as paving the way for a more solid future.
Nick Batram, analyst at Peel Hunt, said: "Extending the facility looks a sensible move in that it gives the group more time to turn around the business and at the same time there should be less pressure to [hold a] fire sale."
But Simon French, from Panmure Gordon stockbrokers, remained doubtful about the company's prospects: "The key issue is that even after these steps the group has too much debt and too little operating cashflow."
The talks are expected to be completed in the coming weeks, and the strategic review to be announced by the time of the company's interim results, due before the end of May.