12 Jul 2019
Thomas Cook in £750m rescue deal
After going through some struggles recently, global travel company, Thomas Cook are now in talks with banks and their Chinese investor Fosun, over a £750 million rescue deal.
In discussions with their largest shareholder, Fosun, Thomas Cook are looking for them to buy their tour business. Their chief executive, Peter Fankhauser, remarked how the proposal was not an outcome they wanted, however, was a pragmatic one.
He reassured that customers don’t need to worry about this news as their holiday bookings are secure.
Mr Fankhauser, commented:
“They can book with us without worries
“We have enough resources to operate our business so they can enjoy their holidays with us.”
This cash injection would give the group enough money to trade though to the end of next year and invest more into their future.
Earlier this year Thomas Cook announced the closure of some of its stores and other cost-cutting measures, but reiterated that holidaymakers could have complete confidence as they are an ATOL protected business.
The ATOL protection scheme ensures UK travellers on holiday packages do not lose their money or become stranded abroad if the travel agent collapses.
Travel agents are finding it increasingly difficult to maintain a presence on High Streets in recent times, as they are faced with intense online competition.
Following the launch of their strategic review in February, they saw a drop in sales and uncertainty around Brexit, contributing to the deterioration of the market. In March they announced their plans for closures and in May they reported a £1.5 billion half-year loss.
All of this has hit the company’s finances hard and made it difficult for them to sell their airline or tour business, which is why they have asked for help to generate cash, forcing them to enter discussions with Fosun and banks.