Thomas Cook took another step towards calmer waters yesterday by announcing a £425 million fundraising with shareholders in a bid to cut debt.

The move, which is part of a wider £1.6 billion refinancing plan, came as the tour operator reported encouraging trading for the summer season, including a 10% reduction in the number of holidays left to sell compared with last year.

Under new chief executive Harriet Green, Thomas Cook also said it cut losses to £275.6m for the seasonally quieter half year to March 31.

She said progress made over the past year in restructuring the business had enabled it to carry out the refinancing, which will include a deeply discounted rights issue raising around £305m.

The UK's second-largest holiday operator, which staved off collapse a year ago following a rescue deal with lenders, recently unveiled a strategy based on offering "personal" holiday experiences and more city breaks.

It is also cutting costs by £170m in this financial year, an increase of about £25m on previous forecasts.

Ms Green said the refinancing will reduce the company's "very significant debt", lengthen its repayment profile and help it deliver its recovery plan.

She added: "We look forward to continuing the rapid transformation of the group so that we fulfil the potential of the Thomas Cook brand for our customers, suppliers and employees."

Thomas Cook said it had sold around 60% of its holidays for the summer season, an increase of 2% on a year earlier.