- The relevant cash injection will give the Thomas Cook Group sufficient funds to trade until the end of next year and invest in future construction.
- Thomas Cook’s share price has plummeted more than 80% in the past 12 months.
- A news report said the company's current market value is about $255 million.
Thomas Cook Group, the UK’s largest travel agency operator, is in financial trouble and is negotiating with banks and its largest shareholder, China Fosun International. The agreement to be finalized will determine whether Fosun International will acquire Thomas Cook’s tourism business.
Thomas Cook, the predecessor of the Thomas Cook Group, and Son Travel Company, founded in 1841, are pioneers in tourism throughout the UK and around the world. The current Thomas Cook Group is a London-listed company with a wide range of businesses, including hotels, airlines, travel agencies, etc. It is the world’s largest group and supporting travel company.
In 2015, Fosun International acquired a 5% stake in the Thomas Cook Group and stated that it intended to continue to increase its shareholding to 10%, but will not acquire the whole company. Thomas Cook’s CEO, Peter Van Hauser, said the proposal was not what it hoped to see, but it was the best and realistic option for the group’s customers, suppliers, and employees, and would ensure Thomas’ future of Cook’s business.
He told news reporters that (UK) customers don’t have to worry because their bookings have not changed. He said that customers can continue to book holiday trips with the company without any worries. The company has sufficient resources to run its business and ensure that customers enjoy the holidays.
The relevant cash injection will give the Thomas Cook Group sufficient funds to trade until the end of next year and invest in future construction. The travel agency made a strategic business review and summary in early 2019 but believes that the European travel market has become more and more challenging since then.
Various complex factors have hit the company’s financial situation and made its cash flow difficult. Therefore, the group was forced to negotiate with the relevant banks and Fosun. If the deal is reached, Fosun may become a major shareholder of Thomas Cook’s travel business and become a larger minority shareholder of its airlines.
Many people are not optimistic about the transaction. Some analysts believe that the current holdings of the company’s shares will seriously dilute their investment value because of the proposed transaction. Some even think that the plan may indicate that Thomas Cook will withdraw from the stock market, making the world’s oldest supporting resort company a private company. After Fosun acquired the French Club in 2015, it completed the privatization delisting.
Thomas Cook’s share price has plummeted more than 80% in the past 12 months. A news report said the company’s current market value is about $255 million.