Thomas Cook collapses, 600,000 stranded abroad
OGovt launches ‘largest repatriation in peacetime history’
LONDON: British travel firm Thomas Cook collapsed into bankruptcy yesterday, leaving some 600,000 holidaymakers stranded and sparking the UK’s biggest repatriation since World War II.
The 178-year-old debt-plagued group, which had struggled against fierce online competition for some time and blamed Brexit uncertainty for a recent drop in bookings, failed to secure £200 million (RM1.04 billion) from private investors and collapsed in the early hours.
Yesterday's bankruptcy, which followed a lengthy period of chronic financial turmoil after a disastrous 2007 merger deal, left some 600,000 tourists stranded worldwide according to Thomas Cook, while its 22,000 staff are now out of a job.
The British government launched emergency plans to bring some 150,000 UK holidaymakers back home from destinations including Bulgaria, Cuba, Turkey and the United States.
Thomas Cook said in a statement that “despite considerable efforts”, it was unable to reach an agreement between the company’s stakeholders and proposed new money providers.
“The company’s board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect,"” it added.
The long-troubled group has also been blighted by enormous costs arising from its disastrous 2007 merger with MyTravel, a deal which left it plagued with huge levels of debt.
The UK government said yesterday it had hired planes to fly home British tourists, in a mass repatriation plan codenamed Operation Matterhorn which began immediately.
Launching Britain’s “largest repatriation in peacetime history”, Transport Secretary Grant Shapps added that the government and UK Civil Aviation Authority had hired dozens of charter planes to fly home Thomas Cook customers.
“All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date,” the government said.
British Prime Minister Boris Johnson revealed that the government had rejected a request from Thomas Cook for a bailout of about £150 million because doing so would have set up a “moral hazard”.
"It is a very difficult situation and obviously our thoughts are very much with the customers of Thomas Cook, the holiday makers who may now face difficulties getting home we will do our level best to get them home," he told reporters on a plane as he headed to the UN General Assembly in New York.
Both a tour operator and an airline, the travel giant’s key destinations were in southern Europe and the Mediterranean but it offered also holidays in Asia, North Africa and the Caribbean.
As well as grounding its planes, Thomas Cook has been forced to shut travel agencies, leaving the group’s 22,000 global employees – 9,000 of whom are in Britain – out of a job.
Chinese peer Fosun, which was already the biggest shareholder in Thomas Cook, had agreed last month to inject £450 million into the business as part of an initial £900 million rescue package. In return, the Hong Kong-listed conglomerate was to acquire a 75% stake in Thomas Cook’s tour operating division and 25% of its airline unit. But in finalising the terms of the deal, the company was hit with a demand for another facility of £200 million in underwritten funds by its banks.
“Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalisation with other affiliates, core lending banks, senior noteholders and additional involved parties,” Fosun said in a statement to AFP yesterday. – AFP, Reuters