The spread of coronavirus and the European Commission
13th February 2013
Thomas Cook is in 'advanced discussions' with its largest shareholder, and its banks, about an injection of £750 million.
The talks with largest shareholder, Fosun Tourism Group, would provide liquidity for Thomas Cook to trade over the Winter 2019/20 season and the financial flexibility to invest in the business for the future.
Upon completion of the talks, Fosun would own a significant controlling stake in the group tour operator and a significant minority interest in the group airline, Thomas Cook says.
A significant amount of the group's external bank and bond debt will be converted into equity.
Existing shareholders will be significantly diluted as part of the recapitalisation and the proposed recapitalisation will not impact trade creditors.
Peter Fankhauser, chief executive of Thomas Cook, commented: “After evaluating a broad range of options to reduce our debt and to put our finances onto 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 long-standing shareholder, Fosun, and our core lending banks.
“While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees.”
Recapitalisation would replace a £300 million funding facility agreed in May, but the proposal remains subject to several conditions including due diligence, agreements with stakeholders, and performance criteria, as well as regulatory approval.
Thomas Cook had intended to release a third-quarter trading update on July 18, but that is now cancelled.