Struggling Thomas Cook Group said it has achieved a “substantial agreement” regarding key commercial terms over the recapitalisation of the company, securing the future of the travel firm and the airline arm.
As part of the rescue deal, main shareholder Fosun Tourism Group will inject £450 million worth of capital, in return for at least 75 per cent of the equity of the group’s tour operator arm and 25 per cent of the group’s airline.
The agreement will see the Chinese tourism group will take control of the business at the expense of other shareholders.
Thomas Cook’s lending banks and bondholders will contribute a further £450 million for 75 per cent of the airline and up to 25 per cent of the tour operator business.
Implementation commitment is targeted for early October 2019.
Thomas Cook Group said the recapitalisation is expected to result in existing shareholders’ interests in the recapitalised and reorganised group airline being “significantly diluted”, but added it was the best way forward to secure the future for all stakeholders.
In May, the cash-strapped group reported a loss before tax of £1.45 billion for the six months ending 31 March 2019. Revenue was down £208 million to £3.01 billion.