Thomas Cook seeks £200 million in extra funding to avoid collapse

Andrew Cummings
September 21, 2019

When news of Thomas Cook's financial problems first arose earlier this year, MoneySavingExpert issued advice to travellers.

Thomas Cook had warned in an update in August that the rescue deal was expected to significantly dilute its existing shareholders and could result in its delisting from the market.

Thomas Cook, which has around 600,000 customers on holiday in Europe, has struggled with competition in popular destinations, high debt levels and an unusually hot summer in 2018 which reduced last-minute bookings.

Beleaguered travel company Thomas Cook confirmed on Friday that it is looking for an additional £200m in funding to avoid going bust, as unions called on the government to intervene.

The group announced last month that there had been "substantial agreement" on the key commercial terms of a rescue deal that would see Fosun, its largest shareholder, take a 75% stake in the tour operating business and a 25% stake in the airline for £450m.

In May, Thomas Cook reported a $2.8 billion loss for the first half of the year, the BBC reported.

"Our proposed contribution of £450-million has not changed throughout this process", a spokesman for Fosun Tourism Group said.

Anxious customers and family members of holidaymakers who fear being stranded overseas have contacted the touring operator on Twitter to find out what security Thomas Cook will offer.

If Britain does the same for Thomas Cook's customers, then the 160,000 Britons overseas that would need repatriation would eclipse the number brought home after Monarch's collapse.

Known as Operation Matterhorn, it has been put together by the Department for Transport (DfT) and the Civil Aviation Authority, the paper said.

The money required would be a "seasonal stand-by facility" and come on top of the 900 million pounds of new capital already raised, Thomas Cook said in a statement Friday.

An urgent plea has been made to the Government to ensure tax-payer supported banks do not bring down Peterborough-based Thomas Cook.

"If Thomas Cook goes into administration it will cost the taxpayer as much to repatriate holidaymakers as it would cost to save Thomas Cook", General Secretary Brian Strutton said in a statement.

"The government sat on the sidelines wringing its hands when Monarch Airlines was let down by its financiers, this time government needs to get a grip and do its bit to save Thomas Cook", he said.

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