Thomas Cook Group announced on Friday, that it was in advanced talks with its largest shareholder, Fosun Tourism Group, as well as with banks to secure a 750-million-pound cash injection that would provide the liquidity to trade through to 2020 and invest for the future.
In what Thomas Cook’s CEO Peter Fankhauser said was a “pragmatic” proposal but “not the outcome any of us wanted”, the troubled travel company was examining a deal involving a debt-for-equity swap handing Fosun “a significant controlling stake” in the firm’s tour operator business.
The company clarified however that the agreement would only offer a minority interest in its airline.
“After evaluating a broad range of options to reduce our debt and to put our finances on to a more sustainable footing, the board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our longstanding shareholder, Fosun, and our core lending banks,” Fankhauser said in a statement.
Fosun owns holiday group Club Med and has had a stake in Thomas Cook since 2015.
‘Holiday Plans are Safe’
Fankhauser told BBC that customers did not need to worry because their holiday bookings were “secure”.
“They can book with us without worries,” he said, adding that “we have enough resources to operate our business so they can enjoy their holidays with us.”
According to reports, more than 11 million travelers have booked with the company this summer.
“Thomas Cook holidays and flights will not be impacted and will continue to operate as normal. All of our holidays are still ATOL-protected, and you can book your holidays and flights with confidence,” a spokeswoman for the company added.
Meanwhile, shares in the London-based 178-year-old group dropped by 40 percent after the news.