Thomas Cook has agreed on the key commercial terms for a $1.1 billion recapitalization, which will include ownership changes at the group’s airline unit.
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Thomas Cook plans to sell the majority of its tour operator business and a stake in its airline business to Fosun, which is already the company’s largest shareholder. They agreed to key terms of the rescue deal with the Chinese company. Fosun’s goal is to save the Thomas Cook group.
According to the terms of the agreement, Fosun will inject an additional $550 million into Thomas Cook Group. In return, it will take control of a 75% stake in the tour operator business and a 25% stake in the group’s airlines. They are making this deal to avoid bankruptcy before winter when holiday bookings are at their lowest. The deal should be set in October.
“Implementation of the proposed recapitalization will involve significant new capital investment and reorganization of the group,” Thomas Cook said.
Thomas Cook warned that new owners may cancel its publicly traded shares and take the company private. It is predicted that the deal would also significantly reduce the value of shares held by other investors.
Thomas Cook had this to say in a stock market announcement:
“The current intention of the board is to maintain the company’s listing. However, the implementation of the proposed recapitalization may, in certain circumstances, result in the cancellation of the company’s listing.”
Shanghai-based Fosun with this move will be getting deeper into the European market. They already own the holiday resort chain Club Med and the Premier League football club Wolverhampton Wanderers.
Will your holiday booked through them be affected?
Thomas Cook is assuring that holidays will still go ahead and that they can be booked as usual. All holidays are ATOL protected.
What does an ATOL protected holiday mean?
ATOL protects you when you book a holiday with a UK travel company. It ensures that you don’t lose the money you paid out or become stranded abroad if your travel company collapses. If an ATOL protected travel company ceases trading, the scheme protects customers who have booked holidays with the firm.