Proposed recapitalisation of Thomas Cook Group

Proposed recapitalisation of Thomas Cook Group

Thomas Cook has revealed plans for their largest shareholder to potentially inject 750 million pounds to save the business.

The travel company said that it is in advanced discussions with Chinese investor Fosun on its future.

 

They claim the investment would be enough to allow them to trade until the end of next year.

In a statement on the Thomas Cook Group website, they have said the following...

"Thomas Cook Group (the “Group”) announces that it is in advanced discussions with the Group’s largest shareholder, Fosun Tourism Group and its affiliates (“Fosun”), and Thomas Cook’s core lending banks on the key commercial principles on which they would make a substantial new capital investment as part of a proposed recapitalisation and separation of the Group.

 Under the proposal, the Group is targeting an injection of £750 million of new money which would provide sufficient liquidity to trade over the Winter 2019/20 season and the financial flexibility to invest in the business for the future. At completion, the new money would comprise a capital injection and new financing facilities.   The recapitalisation proposal will require a reorganisation of the ownership of the Tour Operator and Airline businesses which is expected to result in Fosun owning a significant controlling stake in the Group Tour Operator and a significant minority interest in the Group Airline. The proposal envisages that a significant amount of the Group’s external bank and bond debt will be converted into equity, to be agreed following discussions with financial creditors. The Group’s core lending banks are supportive of a recapitalisation and are engaged in constructive discussions with the Group to agree terms. The proposed recapitalisation will not impact trade creditors.   Existing shareholders will be significantly diluted as part of the recapitalisation. However, shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun and converting financial creditors on terms to be agreed." Published: by Radio NewsHub
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