After a difficult summer for the travel industry, with weak demand and Brexit uncertainty, Thomas Cook’s future now appears to be assured.
To the relief of the firm’s 21,000 employees, and millions of travellers with forward bookings on Thomas Cook, the Chinese firm Fosun will inject £450m. It will acquire at least 75 percent of the group’s tour operations and 25 per cent of Thomas Cook Airlines.
Thomas Cook’s creditors will also pump in £450m and convert debt into equity in the company—25 percent of the tour operation and 75 percent of the airline.
In the autumn, travel firms’ cash flow traditionally switches abruptly from positive to negative. The aim is for the funds to arrive by early October, before the winter season begins.
“The execution of the transaction remains subject to a legally binding agreement being reached amongst the parties to the recapitalisation plan and, where appropriate, the group’s other key stakeholders,” a Thomas Cook statement read.
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The share price fell 14 percent in early trading to 6p. Existing shareholders in Thomas Cook have seen the value of their investments fall by 93 percent in the past year. (Independent)
