Thomas Cook has confirmed this morning that is in talks with its largest shareholder and the owner of Club Med, China’s Fosun, over a rescue deal.
Britain’s oldest package holiday company, which has been struggling with a large debt pile and weaker trading, said it was in “advanced discussions” with Fosun, which -together with Thomas Cook’s core lending banks – inject £750m into the firm, allowing it to keep trading over the winter season.
The deal would give Fosun a large majority of the tour operator business and a large minority stake in its airline, diluting the shareholding of existing investors.
Chief executive Peter Fankhauser said the deal would secure a future for the business, its customers and its employees:
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.