Thomas Cook Travel Agency in £750 Million Rescue Deal Agreement

  • 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 Group plc is a British global travel company. It was formed on 19 June 2007 by the merger of Thomas Cook AG, itself the successor to Thomas Cook & Son, and MyTravel Group plc. The group owns a number of tour operators including Thomas Cook, Airtours, Ving and Neckermann, as well as Thomas Cook Airlines, Condor, Thomas Cook Airlines Scandinavia and Thomas Cook Airlines Balearics. It is listed on both the London Stock Exchange and the Frankfurt Stock Exchange.

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.

Fosun International Limited is a Chinese international conglomerate and investment company. Founded in 1992 by Guo Guangchang and four others, the company is headquartered in Shanghai and was incorporated in Hong Kong in 2004. Its CEO is Wang Qunbin, who replaced Liang Xinjun who resigned in March 2017. Guo Guangchang remains as the chairman of Fosun International. The company is located in 16 countries and ranked 416th on the Forbes Global 2000 ranking.

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.

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George Mtimba

George clarifies how the news is changing the world, how world news trends affect you. Also, George is a professional journalist, a freelance news reporter and writer who is passionate with current world news.


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