Travel operator Thomas Cook, which had already asked for £750m, wants to stave off winter cash crunch. The operator already lost fifth of its value
Shares in Thomas Cook have slumped after the travel operator said it was seeking to raise another 180m euros from investors to stave off a Christmas cash crunch.
Thomas Cook said it was in advanced discussions with its banks and Fosun, the Chinese conglomerate and its biggest shareholder, over the “substantial new capital investment”. Shares fell by a fifth on Monday to 7.5p, raising doubts about the company’s survival.
Thomas Cook, the UK tour operator, lost nearly a fifth of its market value after it confirmed it was seeking a further 180m euros to stave off a Christmas cash crunch.
The Financial Times revealed on Friday that Thomas Cook was in talks with bondholders to secure the additional capital, as part of a bailout involving its largest shareholder, the Chinese conglomerate Fosun, and its lending banks.
On Monday, it confirmed the talks in a stock market announcement and reiterated that the debt-for-equity swap would result in existing shareholders being “significantly diluted”. It added that the shareholders “may be given the opportunity to participate in the recapitalisation on terms to be agreed between, among others, the company, Fosun, and the converting financial creditors”.
Shares were as low as 7 pence in early trading giving the 178-year-old company a market value of £120.5m before paring back some of the losses. Since February, when Thomas Cook announced the sale of its profitable airline in an effort to pay down its mounting debt pile, the embattled tour operator has taken several steps to avoid a collapse of the business.
The latest request for cash came a month after Thomas Cook revealed it was in talks over a £750m rescue deal with Fosun, a Shanghai-based company with diverse interests that include Wolverhampton Wanderers football club, insurance and property businesses and the Club Med tourism brand.
Thomas Cook put its airline up for sale in February in a bid to raise cash. It said in May that it had received interest from seven bidders, but was unable to do a deal and instead turned to Fosun to rescue the holiday business and take a minority stake in the airline. EU rules prevented Fosun taking full control of the airline. Thomas Cook’s chief executive, Peter Fankhauser, described the deal at the time as “not the outcome any of us wanted”.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
