• Privacy policy
  • T&C’s
  • About Us
    • FAQ
  • Contact us
  • Guest Content
  • TLE
  • News
  • Politics
  • Opinion
    • Elevenses
  • Business
  • Food
  • Travel
  • Property
  • JOBS
  • All
    • All Entertainment
    • Film
    • Sport
    • Tech/Auto
    • Lifestyle
    • Lottery Results
      • Lotto
      • Set For Life
      • Thunderball
      • EuroMillions
No Result
View All Result
The London Economic
SUPPORT THE LONDON ECONOMIC
NEWSLETTER
The London Economic
No Result
View All Result
Home Travel

Thomas Cook seeks £200m to avoid collapse as cost to bring back stranded holidaymakers could cost £600m

Government officials have drawn up plans for what would be “Britain’s biggest peacetime repatriation”

Ben Gelblum by Ben Gelblum
2019-09-20 09:38
in Travel
File photo dated 19/05/16 of a Thomas Cook logo on an aeroplane. Troubled travel company Thomas Cook has agreed the key terms to a rescue deal with Chinese firm Fosun, lenders and bondholders to secure the company's future.

File photo dated 19/05/16 of a Thomas Cook logo on an aeroplane. Troubled travel company Thomas Cook has agreed the key terms to a rescue deal with Chinese firm Fosun, lenders and bondholders to secure the company's future.

FacebookTwitterLinkedinEmailWhatsapp

Thomas Cook, which employs 22,000 staff including about 9,000 in the UK, is battling to secure the terms of a complex refinancing agreement to stop Britain’s oldest travel agent from going under.

The 178-year-old travel agent with thousands of staff in 16 countries is attempting an urgent £900 milion restructure. 

The firm, founded in 1841, is attempting a last-ditch fire-sale in a bid to stave off collapse and avert the biggest-ever peacetime repatriation of British citizens.

The travel giant which has blamed over £1.6 billion debt, as well external difficulties such as Brexit and instability in Turkey could go into administration as early as this weekend.

180,000 stranded tourists

If that happened as many as 180,000 tourists could be left stranded abroad. 

The taxpayer would be left with a huge £600 million to bring home 180,000 stranded customers, industry experts estimate.  That would be ten times the cost when Monarch went under.

Which has led to calls to help save the travel giant with the lesser – but no less eye-watering sum of £200 million for the rescue package to go ahead.

Thomas Cook package holidays are protected by ATOL, which means customers would be flown home and refunded any cancelled holidays for free.

However many travelers who have only bought flights from Thomas Cook would not be protected by the ATOL scheme.

RelatedPosts

Ever wanted to travel on a vintage tube train? Now you can!

Don’t Let Cancelled Flights Cost You. Know Your Rights Under UK & EU Law

Top Sustainable Travel Tips for Exploring Eco-Friendly Singapore

Hotel review: Matfen Hall, Northumberland

The firm is reeling from £1.6billion of debt, dating back to its takeover of MyTravel in 2007. It has to sell three million holidays a year just to cover the interest.

Other factors are the big shift in people arranging holidays themselves online and Brits avoiding booking holidays due to concerns over Brexit.

A rescue deal with Thomas Cook’s largest shareholder Chinese company Fosun and a group of hedge funds which owned its bonds was announced in July.

Banks demand an extra £200 million

But RBS and other banks who have are lending money to the travel giant are demanding an extra £200 million be pumped into the rescue package, the Daily Mail reports.

The company said it is in talks with stakeholders, including leading shareholder Chinese firm Fosun, to bridge the funding gap to stave off entering administration.

In an update to the market, it said the fundraiser is expected to significantly dilute existing shareholders’ stakes in the firm, with “significant risk of no recovery”.

Thomas Cook said the £200 million needed would be a “seasonal standby facility”, on top of £900 million it had already raised from Fosun and its lenders.

The travel firm has suffered recently as a result of mounting debts, reporting a £1.2 billion net debt in its half-year results in May.

It has also been hit hard by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.

“Britain’s biggest peacetime repatriation”.

The 178-year-old firm could go bust by Sunday, company insiders have allegedly told the Daily Mail.

The paper also said that government officials have drawn up plans for what would be “Britain’s biggest peacetime repatriation”.

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

A Department for Transport spokeswoman said: “We do not speculate on the financial situation of individual businesses.”

https://twitter.com/ThomasCookUK/status/911282212623937536

In the High Court last month, barrister Tom Smith QC, who led Thomas Cook’s legal team, told Mr Justice Norris that the Thomas Cook group had a “net debt position” of around £1.25 billion.

He said a planned deal with Chinese tourism group Fosun would involve an injection of £900 million of “new money”.

Mr Smith said Thomas Cook had suffered because of a “general economic downturn”, declining consumer confidence, increased competition from lower cost rivals, the effects of a heatwave in 2018, “environmental concerns” and the weak performance of sterling.

Tags: headline

Subscribe to our Newsletter

View our  Privacy Policy and Terms & Conditions

About Us

TheLondonEconomic.com – Open, accessible and accountable news, sport, culture and lifestyle.

Read more

SUPPORT

We do not charge or put articles behind a paywall. If you can, please show your appreciation for our free content by donating whatever you think is fair to help keep TLE growing and support real, independent, investigative journalism.

DONATE & SUPPORT

Contact

Editorial enquiries, please contact: [email protected]

Commercial enquiries, please contact: [email protected]

Address

The London Economic Newspaper Limited t/a TLE
Company number 09221879
International House,
24 Holborn Viaduct,
London EC1A 2BN,
United Kingdom

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

No Result
View All Result
  • Home
  • News
  • Politics
  • Lottery Results
    • Lotto
    • Set For Life
    • Thunderball
    • EuroMillions
  • Business
  • Sport
  • Entertainment
  • Lifestyle
  • Food
  • Travel
  • JOBS
  • More…
    • Elevenses
    • Opinion
    • Property
    • Tech & Auto
  • About Us
    • Privacy policy
  • Contact us

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

← Today’s global climate strike set to be biggest environmental protest in history ← Headmistress: Let pupils make own decisions over climate strikes
No Result
View All Result
  • Home
  • News
  • Politics
  • Lottery Results
    • Lotto
    • Set For Life
    • Thunderball
    • EuroMillions
  • Business
  • Sport
  • Entertainment
  • Lifestyle
  • Food
  • Travel
  • JOBS
  • More…
    • Elevenses
    • Opinion
    • Property
    • Tech & Auto
  • About Us
    • Privacy policy
  • Contact us

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

-->