Thomas Cook’s £900m package deal could end its London listing

THOMAS COOK could be on the verge of disappearing from the stock market after the travel company reached “substantial agreement” with a Chinese conglomerate and its creditors on the key terms of a £900m rescue deal.

Fosun, the owner of Club Med and Thomas Cook’s largest shareholder, will pump in an additional £450m under the agreement, as well as buy at least 75pc of its tour operator business and 25pc of its airline.

Fosun cannot own a majority stake in the airline under European Union aviation rules.

Thomas Cook’s banks and bondholders would make an additional £450m available and have their existing loans converted into equity in return for the other 25pc of new shares in the tour operator and a 75pc stake in the troubled airline.

The board intends to keep its London Stock Exchange listing, but the company admitted the rescue plan could “in certain circumstances” result in the listing being cancelled.

Shareholders in the ailing travel company would be all but wiped out, but Thomas Cook said it still aimed to proceed with their support.

It did not give any detail on how or whether shareholders would be allowed to buy more stock or what proportion of the restructured group their existing holdings would represent.

Based on the value of the bonds, converting the amounts owed to banks and bondholders into equity “would imply around another £350m of new shares being issued”, said Citi analyst James Ainley.

The shares have fallen more than 90pc in the past year and shed another 17pc to 5.8p yesterday, valuing Thomas Cook at less than £90m.

It was worth about £2bn less than 18 months ago. Thomas Cook aims to implement the plan, which remains subject to a legal agreement among the parties, in early October.

It also remains subject to a number of additional hurdles, including clearance from competition regulators, formal approval from creditors and separating the airline and tour operator businesses.