Fosun Tourism Group, the largest stakeholder of Thomas Cook Group will contribute £450 million to the group and acquire 75% of the tour-operator business and 25% of the airlines unit.
The deal will include Fosun's affiliates, the company's core lending banks and a majority of the company's 2022 and 2023 senior noteholders.
The Implementation of the proposed recapitalisation will involve a significant new capital investment and reorganisation of the group with implementation targeted for early October 2019.
In its announcement back in July, Thomas Cook stated that shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun and converting senior creditors on terms to be agreed.
The board says its current intention is to maintain the company’s listing on the London Stock Exchange. However, the implementation of the proposed recapitalisation may, in certain circumstances, result in the cancellation of the company’s listing.
With the proposed recapitalisation, the mandate letter and term sheet for a £300 million secured bank financing facility announced in May 2019 will be allowed to lapse.
Thomas Cook posted a £1.5 billion half-year loss in its latest financial results, which the group blamed on Brexit uncertainty.
This is a significant increase in its results for the six months to 31 March 2019, when compared to the £303 million loss in the same period a year ago.
Thomas Cook’s underlying earnings before interest and tax loss increased to £245 million, up nearly £80 million from the same period last year when it posted £170 million.
Revenue during the period dropped to £3 billion from £3.2 billion and net debt rose to £1.25 billion from £886 million.