Thomas Cook’s credit rating was downgraded by Standard & Poor’s coupled with a warning that the travel group could have to push through a debt restructuring given its “unsustainable” capital position.

The company, which issued a series of profits warnings last year and agreed a £1.4 billion refinancing in May, “continues to face significant operating challenges,” ratings agency S&P said.

Cook shares fell 0.19 to 15.06p on Friday as S&P cut the company’s credit rating from B to B-, with a negative outlook, and said Europe’s second largest travel group would find it difficult to stabilise cash flows.

“Thomas Cook’s capital structure could become unsustainable over the medium to long term,” S&P said. “Our negative outlook also takes into account the increasing risk that the group could possibly undertake credit-dilutive debt restructuring measures.”

That backdrop could lead the group to break banking covenants “as soon as mid-2013”, it warned.

S&P said while it regarded the refinancing as positive, a lack of visibility on profits and cash flow generation “represents a key concern”.

S&P added: “This could jeopardise any refinancing attempt.”

A Cook spokesman said the S&P report “largely relates to issues that are already well understood by the market. We have a new longer-term banking agreement and are well under way in implementing a turnaround across our underperforming businesses.”