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

Live Facial Recognition Cameras Will Be Used By London Police

Driverless Vehicle For Its Ride-Sharing Service Unveiled By GM’s Cruise

Amazon will allow customers to pay with palms instead of cards

Complete Computer System For Self Driving Cars Launched By Qualcomm

In A Lifetime We Could Accumulate 20Kg Micro-Plastic In Our Body

Creator Of The First 'Gene-Edited' Babies Of The World Gets 3 Year Jail Term In China

China to deploy giant Beidou global navigation system in 2020

VW Zwickau factory is getting ready for electric cars production

Airbus: Passenger hybrid aircraft to take off before 2035

Ocado To Introduce ‘Mini Robotic Warehouse’ With Standard Productivity

World Politics

World & Politics

French tour operators will stop sending tourists to China until February 21

US Will Not Give Visas To Pregnant Women To Prevent Organized 'Birth Tourism'

Heads of the European Council and European Commission sign Brexit agreement

UK adds Greenpeace, PETA to extremist organizations list

Indonesia, UAE sign nearly $23B deal

US to respond to Iran’s attacks on US bases in Iraq

Irish Passport issues hit record in anticipation of Brexit

Reporters Without Borders calls to release Julian Assange