Shares in Thomas Cook fell further yesterday amid investor concern over its debt and poor trading.

Shares of the travel group, which had halved since its latest profit warning last week, fell by a further 16.7% to 19¾p at one point yesterday before closing down 3.9% at 22¾p.

The slump in the share price has slashed the firm’s market value to about £348 million, from £2.2 billion in May.

This means it is worth less than the size of its debt of £389 million.

Shares have lost more than half of their value over the past week, after Thomas Cook issued its second profit warning in two months after its UK operations were hit by the summer heatwave.

Fears over Thomas Cook’s debt led to the cost of insuring debt issued by the company against default hitting a record high, while the value of its bonds also fell, The Times reported.

Thomas Cook also faces demotion from the second tier of the FTSE index, the FTSE 250.

Chief executive Peter Fankhauser has been meeting the company’s big shareholders since last week’s full-year results to assure them that he is stamping down on costs while accelerating the expansion of its higher-margin own-brand hotels.

Fankhauser is understood to have been keen to play down a particularly bearish research note from German broker Berenberg suggesting that the company needed a £400 million-plus equity injection.

Thomas Cook announced this morning that chairman Frank Meysman has spent about £80,000 purchasing 373,000 shares in the company at 21.6p.