News ID: 255670
Published: 1112 GMT July 12, 2019

Thomas Cook in £750m rescue deal talks

Thomas Cook in £750m rescue deal talks

Troubled travel company Thomas Cook is in £750 million rescue talks with banks and its largest shareholder, Fosun.

The measures, which have not been finalized, would see the Chinese investor buy the firm's tour business, BBC reported.

Thomas Cook's chief executive, Peter Fankhauser, said the proposal was "not the outcome any of us wanted" but insisted it was ‘pragmatic’.

He told the BBC that customers did not need to worry because their holiday bookings were ‘secure’.


Is my holiday safe?


"They can book with us without worries," Fankhauser said. "We have enough resources to operate our business so they can enjoy their holidays with us."

And this cash injection would give the group enough money to trade through to the end of next year and invest for the future, Thomas Cook said.


Why does Thomas Cook need the money?


The travel agent has found it difficult to maintain a presence on the High Street in the face of increased online competition. Last year, it also issued a number of profit warnings blaming a heatwave for a dip in summer holiday bookings.

It launched a strategic review in February, but since then, dwindling bookings and uncertainty surrounding Brexit have contributed to a deterioration in the market. In March, the firm announced plans to close 21 stores, costing more than 300 jobs, and in May, it revealed a £1.5 billion half-year loss.

Thomas Cook said it was trying to combat those challenges with a "rigorous focus on cost" and by "delivering a stronger holiday offering to customers through high quality, higher-margin hotels".


Is it a good deal?


Fankhauser told the BBC's program that "considering all options we had on the table", the deal was the ‘best available’ choice.

Responding to a suggestion that the proposed deal was a last resort, he said, "This is a very good option to secure the business and to put the business on a solid financial foot for the future."

Earlier, in a statement issued by Thomas Cook, Fankhauser said: "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."

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