Fears for Britain’s oldest travel firm Thomas Cook as they ‘hold talks about emergency sales of assets to stave off going bust’
- Thomas Cook is in talks about an emergency ‘fire-sale’ of assets, sources said
- The company employs 21,000 people in 16 countries, including 9,000 in the UK
- Contingency plans are reportedly underway to repatriate British holidaymakers
- Have you been warned your holiday plans might be affected? Email firstname.lastname@example.org
Britain’s oldest travel firm Thomas Cook is in talks about an emergency sale of assets to avoid collapse, it has emerged.
The holiday operator is facing a ‘critical 24 hours’ and hoping to arrange a ‘fire-sale’ of assets to avoid going into administration in the next few days, sources told Sky News.
Emergency funding options are said to include the sale of its airline and tour operating business in northern Europe.
The uncertainty leaves 21,000 Thomas Cook employees in 16 countries in the lurch, including 9,000 in the UK, as well as thousands more holidaymakers who are currently abroad with the firm.
Britain’s oldest travel firm Thomas Cook is in talks about an emergency sale of assets to avoid collapse, it has emerged
Authorities including the Civil Aviation Authority and the Department for Transport are already making emergency plans to bring British tourists home, it is claimed.
Chinese firm Fosun, which also owns Wolverhampton Wanderers football club, has agreed terms for a £900million rescue deal but it is yet to be completed.
Under the terms of the deal, Fosun will contribute £450million of new money in return for at least 75 per cent of Travel Cook’s tour operator business and 25 per cent of its airline.
Thomas Cook’s lending banks and bondholders will stump up a further £450million and convert their debt into a share of ownership.
The company filed for Chapter 15 bankruptcy protection in the United States earlier this week, a technical process they must go through before the plan is voted on.
Once that process is complete, creditors will vote on the rescue plan next Friday, September 27.
A court date to approve the plan is scheduled for September 30.
If creditors vote to reject the plan, that would leave the firm scrabbling to secure its future by early October and the off-peak winter season, when cash reserves are low.
Barrister Tom Smith QC told a court last month that the Thomas Cook group had a ‘net debt position’ of around £1.25billion.
Mr Smith said Thomas Cook had suffered because of a ‘general economic downturn’, declining consumer confidence, increased competition from lower cost rivals, the effects of a heatwave in 2018, ‘environmental concerns’ and the weak performance of sterling.
The company was initially founded in 1841 by Thomas Cook himself, a Victorian cabinet maker.