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Thomas Cook agrees £900m rescue deal by Chinese investor and lenders | Business News

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Thomas Cook has agreed to a £900m rescue deal which will see the business carved up between a Chinese investor and lenders – and potentially lose its stock market listing.

The deal which will see China’s Fosun inject £450m and take a 75% stake in its tour operating arm plus 25% of its airline.

Lenders will also plough in £450m and convert much of the company debt pile of more than £1bn into shares.

That will see the lenders taking 75% of the airline and 25% of the tour operator – and means existing shareholders interests are likely to be “significantly diluted”.

Chief executive Peter Fankhauser has admitted to Sky News that the arrangement, first set out last month, would be a “bitter pill” to swallow for loyal investors.

Thomas Cook
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Lenders will take a 75% stake in Thomas Cook’s airline business

Thomas Cook said on Wednesday that it had now reached “substantial agreement” on the deal.

The company said it planned to maintain the current listing on the London stock exchange but added that the recapitalisation deal “may, in certain circumstances, result in the cancellation of the group’s listing”.

The break-up of the 178-year-old company is expected to take effect in early October.

Thomas Cook employs 21,000 people including 9,000 in the UK.



Peter Fankhauser



July: Thomas Cook bailout a ‘pragmatic solution’

In recent months it has been struggling to shore up confidence among holidaymakers and lenders and seen its share price collapse. Analysts at Citi have said its shares are effectively worthless.

They slumped by a further 16% on the latest update.

In May, the company reported a half-year loss of £1.46bn as it counted the cost of Brexit uncertainty causing UK consumers to delay holiday plans.

It said earlier this year that it would close 21 high street shops and cut back its retail workforce – and a much-larger proportion of its 566-strong chain is likely to be seen as vulnerable amid changing consumer behaviour.

Fosun, which has been a shareholder in Thomas Cook since 2015, already owns French holiday company Club Med.

It is understood to see the British travel operator as a valuable platform for further expansion into the European travel market.

The deal remains subject to a legally-binding agreement being reached between the parties and other “key stakeholders”, Thomas Cook said.

It said the transaction would not impact customers or trade creditors.

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