The travel company Thomas Cook is currently in talks that could lead to the business being bailed out by its biggest shareholder and several banks, with a potential cash injection of £750m. This UK-based travel service, which employs approximately 19,000 people across the UK and Ireland, may need to implement drastic measures to combat falling revenue, including a Chinese company taking over the entire operation before the end of the summer.
Despite some viewing this as the worst-case scenario for the company, a statement has referred to the action as ‘pragmatic’ in its approach to saving the business from going bankrupt. Thomas Cook plans to continue day-to-day operations while negotiating a deal with its largest shareholder, Fosun International, an investment company founded in China worth around $16bn, and UK banks, in the hope that a significant cash injection will revive the company.
Investors and executives are hoping that this will allow the company to continue trading until the end of the year and start saving money for future investment and growth. Thomas Cook has been experiencing financial difficulties for some time, and due to the large number of assets attached to the company, including an airline, it has been challenging to sell pieces to investors in order to raise funds.
This announcement follows the CEO of Thomas Cook revealing that the company would be considering multiple options for saving the business. He has now stated that this is ‘the best deal available’ for them to compete effectively within a highly competitive travel market.
Investors are also being warned that this plan could result in Thomas Cook’s shares being permanently removed from the London Stock Exchange.
Early reports suggest that top executives are considering making the travel group a private company once again. Fosun has been a significant player in the Hong Kong Stock Exchange, investing in companies worldwide, including Canada’s Cirque de Soleil, France’s Club Med, and even Australia’s Roc Oil.