In the recent time, British travel company Thomas Cook Group stated that it had agreed to the major terms of a rescue package that will see Chinese Fosun Tourism to acquire its tour operations and bondholders and creditor banks take over its airline. The oldest travel company worldwide and a pioneer of the package tour, has battled with strong competition in high debt levels, admired destinations, and strangely hot summer in 2018 that decreased its last-minute bookings. The debt saddle meant the travel company had to sell 3 Million holidays a year simply to shell out the interest, it said last month.
In July, Thomas Cook said that it was working to ensure new investment from investor Fosun Tourism that would see the Chinese group to take over the business, together with Thomas Cook’s lenders whose arrears would be converted in the equity. The terms were announced recently and will see Fosun contribute $552 Million (450 million pounds) of new money in response for minimum 25% of the group’s airline and 75% of the tour operator business. Thomas Cook’s bondholders and lending banks will pay up a further 450 million pounds and transfer their existing debt to equity, granting them about 75% of the airline and 25% in the travel company’s business, the group said.
Recently, Thomas Cook was in news as its shares plunged following the travel operator seeks £150 Million from investors. The shares in Thomas Cook have crashed after the company said it was seeking to fetch another £150 Million from shareholders, after already demanding for £750 Million to ward off a Christmas cash crunch. The company reported it was in advanced talks with its banks and Fosun—which is its biggest shareholder—over the “considerable new capital investment.”
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