The Thomas Cook Group said today it is in “advanced discussions” of an additional cash injection of £150 million, on top of the previously £750 million announced on 12 July.
The group is looking to get the extra money from its largest shareholder, Chinese company Fosun Tourism Group and its affiliates (Fosun), and its core lending banks, as part of a proposed recapitalisation of the group.
The move will see a reorganisation of the ownership of the tour operator and airline businesses which would result in a significant amount of the group’s external bank debt (£650 million) and bond debt (€1.15 billion) being converted into equity. Fosun would gain control over the firm’s package tour arm.
As part of the recapitalisation that is set to take place in early October this year, existing shareholders are “expected to be significantly diluted”.
In a statement, Thomas Cook said: “Thomas Cook has made significant progress towards finalising the key transaction terms of the recapitalisation with Fosun, the Group’s core lending banks and subsequently with noteholders representing approximately 50 per cent of the Company’s 2022 and 2023 senior notes.
“The discussions with noteholders include the injection of additional capital on top of the previously announced £750 million. This additional capital, of approximately £150 million, will provide further liquidity headroom through the coming 2019/20 winter cash low period and ensure the business can continue to invest in its strategy.”