The Courier & Advertiser (Perth and Perthshire Edition)
Thomas Cook hunts £200m extra funding to prevent collapse
Stricken travel firm holding talks with stakeholders in bid to stave off threat of administration
Tour operator Thomas Cook has confirmed it is seeking £200 million 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.
According to sources, the firm’s lending banks, including RBS, demanded the extra £200 million 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 £200 million, 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, while the firm employs 22,000 staff around the world including 9,000 in the UK.
Thomas Cook said the £200 million needed would be a “seasonal standby facility”, on top of £900 million it had already raised from Chinese firm Fosun and its lenders.
Thetravelfirmhassufferedrecentlyasa result of mounting debts, reporting a £1.2 billion net debt in its half-year results in May. It has also been hit hard by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.
An RBS spokesman said: “As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook.”
Shares in Thomas Cook dived 20.5% to 3.5p in early trading yesterday.
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, the paper said.
We continue to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook. RBS SPOKESMAN