With the market becoming increasingly challenging, the group is hoping to be bailed out by a Chinese conglomerate
Could this be the end for Thomas Cook (TCG) as we know it?
- Shares fall 36%, compounding losses from an already tough year
- Recapitalisation of business aimed at reducing debt and putting finances into a more sustainable position
- Group Tour Operator bookings are down 9% as a result of the challenging European travel market
The most famous name in UK travel is in discussions to be bailed out by Chinese conglomerate Fosun. The Group is targeting an injection of £750m of new money, aimed at hopefully providing sufficient liquidity to trade over the Winter 2019/20 season. The recapitalisation is also due to be supported by the group’s core lending banks, which would see existing shareholders have their stakes significantly diluted.
There was also another poor trading update which showed first half trends have continued into the second half as a result of the European travel market becoming “progressively more challenging”. Increased competition has put pressure on margins, especially in the UK, a reflection of the uncertain consumer environment. The Group now expects underlying earnings to be lower than the same period last year. The share price, which has collapsed over the last year, is down a further 36% on this news.
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