Cash-strapped travel company Thomas Cook claims it is in “advanced talks” with the Chinese company Fosun, paving the way for the sale of its tour operator.
Fosun, the biggest shareholder of the company, and key lenders of Thomas Cook are considering how the sides could “make a significant new capital investment as part of the company’s suggested recapitalization and separation.” It would also have a major minority interest in the airline business of the group.
The news follows the latest reports that Fosun was looking for an agreement that could lead to the full break-up of the British travel company, the oldest package holiday business in the world.
Thomas Cook is looking for a £ 750 Mn cash injection from Fosun and its lending banks under the proposal.
A Fosun spokesman said: “Fosun is a Thomas Cook shareholder because it is a British company operating in the global travel industry where we have extensive experience.” We are committed investors with a proven track record of turning around iconic brands like ClubMed and Wolverhampton Wanderers FC.
Thomas Cook’s chief executive, Peter Fankhauser, said:
After assessing a wide variety of alternatives for reducing our debt and putting our finances on a more sustainable footing, the board decided to move forward with a strategy to recapitalize the company, backed by a significant injection of fresh cash from our long-standing shareholder, Fosun, and our key lending banks.
While none of us wished this result for our shareholders, this proposition is a pragmatic and accountable solution that offers the means for our clients, our vendors and our staff to secure the future of the Thomas Cook company.”
Thomas Cook has been struggling with a decrease in bookings and uncertainty surrounding Brexit, which he said contributed to 1.5 billion.
Over the previous 12 months, Thomas Cook’s shares have plummeted by more than 80%. Yesterday’s share price was 13.28p, down from last year’s £ 1.04 this time.
The travel company had to reassure panicked vacationers in the midst of fears that the travel company might go bust.