Thomas Cook seeks further £150 million cash injection

Darren Wood
By Darren Wood August 13, 2019 10:10

Thomas Cook seeks further £150 million cash injection

Thomas Cook is looking to get a further £150 million cash injection as talks are underway with its bondholders.

The money will be used to ensure the airline does not run out of cash over the winter period.

It’s said the funds would come on top of the proposed £750 million injection, from its largest shareholder, Fosun Tourism Group – which holds an 18.1% stake in the airline.

Upon completion of the talks, Fosun would own a significant controlling stake in the group tour operator and a significant minority interest in the group airline, Thomas Cook says. 

A significant amount of the group’s external bank and bond debt will be converted into equity.

Existing shareholders will be significantly diluted as part of the recapitalisation and the proposed recapitalisation will not impact trade creditors.

In a statement, Thomas Cook said the money will “provide further liquidity headroom through the coming 2019-20 winter cash-low period and ensure the business can continue to invest in its strategy”.

Last month, Peter Fankhauser, chief executive of Thomas Cook, commented: “After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks.   

“While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees.”   

Recapitalisation would replace a £300 million funding facility agreed in May, but the proposal remains subject to several conditions including due diligence, agreements with stakeholders, and performance criteria, as well as regulatory approval.

Darren Wood
By Darren Wood August 13, 2019 10:10