Daily Management Review

Thomas Cook’s largest shareholder is ready to help in exchange for controlling interest


07/15/2019


The world's oldest travel company, Thomas Cook, announced that negotiations with its largest shareholder, the Fosun Tourism Group, and creditor banks about a new large package of investments in the framework of recapitalization. As expected, the investor’s injection of £ 750 million into the company will allow Thomas Cook to continue normal operations in the near future. In exchange, however, the investor will gain control over Thomas Cook’s tourism operations and share in its airline.



Arpingstone
Arpingstone
British Thomas Cook Group confirmed the fact of negotiating with the largest shareholder on last Monday. On Friday, this world's oldest travel company, operating since 1841, announced details of the negotiations. The parties are discussing recapitalization of a £ 750 million infusion into the Thomas Cook Group, which the Chinese Fosun Tourism Group is ready to make.

These funds will be enough to support the British company throughout the tourist season of 2019/20 and find “financial flexibility for investing in the business in the future,” the press release says.
The Fosun Tourism Group is one of China’s largest private conglomerates. In recent years, it has already bought several European and American companies in the field of health, tourism and fashion, including international travel operator Club Med (transaction amount € 939 million) and the English Premier League football club Wolverhampton Wanderers (£ 45 million ).

Now, the Chinese conglomerate owns an 18 percent stake in Thomas Cook. The deal with Thomas Cook, if is carried out, will increase the package of the Chinese investor in the tour operator to the controlling one. In addition, it will receive a minority stake in Thomas Cook airline.

However, when making a transaction on such terms, value of shares of other shareholders of the British company will significantly blur.

After news of the negotiations with the Chinese investor of Thomas Cook appeared on the London Stock Exchange, the company’s papers fell nearly 47%.

CEO of the travel company, Peter Fankhauser, admits: "It costs us a high price, with a significant erosion of the value of the shares of our current shareholders, many of whom have owned these shares and supported our business for many years."

Thomas Cook’s debts amount to £ 1.2 billion. In the first half of the year, the company posted a loss of £ 1.5 billion; since the beginning of the year its shares have fallen by 60%, and in less than a year the company has made three warnings about lower profits.

source: ft.com






Science & Technology

Uber sues Los Angeles authorities over user data collection

Google Introduces New Coronavirus Website

WHO Warns That The Youth Are ‘Not Invincible' To The Novel Coronavirus

Chinese software company learns to recognize 95% of masked faces

World's largest retailer to use 5G for medical services

SpaceX Receives Approval To Create Research & Manufacturing Facility In Los Angeles

JPMorgan: Transition to e-money will be based on blockchain

Tesla In Advance Talks With CATL For Using Lithium Batteries

Financial giants and US government turn to quantum computers

Long Way To Go For Coronavirus Vaccine, Say Drgumakers

World Politics

World & Politics

US Ambassador To UK Holds China Responsible For Global Spread Of Coronavirus

China to lift quarantine in Wuhan on April 8

Canada, Australia refuse to send athletes to Olympics 2020

Plans For A Possible Delay Of Olympics Being Formulated By Tokyo Organizers: Reuters

Maduro says Venezuela will receive UN assistance to fight coronavirus

2 Million Masks For Coronavirus Crisis In Europe Donated By Jack Ma

National Emergency Declared In The US By Donald Trump Over Coronavirus

China: Coronavirus epidemic peak is over