Thomas Cook seeks £200m in bid to stave off collapse

TOUR operator Thomas Cook has confirmed it is seeking £200m in extra funding as it attempts to prevent a collapse.

The company said it is in talks with stakeholders, including leading shareholder Fosun, to bridge the funding gap to stave off entering administration.

Sources have said the firm’s lending banks, including RBS, demanded the extra £200m to provide further contingency.

Sources added that Thomas Cook has “days rather than weeks” to secure the extra cash.

It is understood Thomas Cook had found a third party to provide the extra £200m, but is now rapidly hunting cash after that party backed out.

In an update to the market, Thomas Cook said the fundraiser is expected to significantly dilute existing shareholders’ stakes in the firm, with “significant risk of no recovery”.

If the company goes under, an estimated 180,000 people could be stranded abroad. The firm employs 22,000 staff around the world including 9,000 in the UK.

Thomas Cook said the £200m needed would be a “seasonal standby facility”, on top of £900m it had already raised from Chinese firm Fosun and its lenders.

The travel firm has suffered recently as a result of mounting debts, reporting a £1.2bn net debt in its half-year results in May.

It has also been hit by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.

The 178-year-old firm could go bust by tomorrow, company insiders have reportedly told the Daily Mail.

The paper also said that Government officials have drawn up plans for what would be “Britain’s biggest peacetime repatriation” if the firm goes under. Known as Operation Matterhorn, it has been put together by the Department for Transport (DfT) and the Civil Aviation Authority.

Shares in the company dived 20.5% to 3.5p in early trading yesterday.