Fosun will inject of GBP 450 million ($522 million) while acquiring at least 75 per cent of Cook’s tour operator arm and 25 per cent of its airline.
Wednesday 28, August 2019
Debt-laden UK travel giant Thomas Cook Group secured the backing of its lending banks and bondholders for a $1.1 billion financial bailout led by Chinese investor Fosun Tourism Group, reported Bloomberg.
Banks and noteholders will contribute the same amount and convert their debt into the remaining shares.
Substantial agreement on commercial terms of a bailout first announced in July provides a boost for the London-based company as it prepares for the coming winter low season when tour operator profits are traditionally squeezed.
The company reiterated that other investors may be given the opportunity to participate in the recapitalisation alongside Fosun, while also saying for the first time that the stock could ultimately be de-listed.
Margins at Thomas Cook have been shrinking amid a sluggish European vacation market as more people holiday at home following successive summer heatwaves. Uncertainty over the economic impact of Brexit has also weighed on demand, with tour operator bookings down this year, leading the company to predict a lower second-half operating profit.
The transaction remains slated for completion in early October, subject to antitrust approval and a legally-binding accord between the parties. Cook will launch inter-conditional creditor schemes of arrangement seeking consent to amend terms of its 2022 and 2023 notes and a 2017 revolving credit.