Thomas Cook needs extra £200 million to avoid administration

Darren Wood
By Darren Wood September 20, 2019 09:42

Thomas Cook needs extra £200 million to avoid administration

An extra £200 million in extra funding is needed otherwise Thomas Cook could fall into administration.

The airline has been told by banks including RBS and Lloyds that new contingency funds are raised in order to continue running during the winter months.

The troubled carrier was hoping to seal a further rescue deal by China’s Fosun this week, however, this looks in doubt now that the banks have asked to find an extra £200 million.

In August, Fosun Tourism Group, the largest stakeholder of Thomas Cook Group, contributed £450 million to the group, acquiring 75% of the tour-operator business and 25% of the airlines unit.

A statement from Thomas Cook said: “Discussions to agree final terms on the recapitalisation and reorganisation of the company are continuing between the company and a range of stakeholders, including its largest shareholder, Fosun Tourism Group and its affiliates, the company’s core lending banks and a majority of the Company’s 2022 and 2023 senior noteholders.

“These discussions include a recent request for a seasonal standby facility of £200 million, on top of the previously announced £900 million injection of new capital.

“The recapitalisation is expected to result in existing shareholders’ interests being significantly diluted, with significant risk of no recovery.

“The Company will provide further updates in due course.”

The firm employs 22,000 staff, 9,000 of those in the UK. It serves 19 million customers a year in 16 different countries.

Darren Wood
By Darren Wood September 20, 2019 09:42