Peterborough’s Thomas Cook in race against the clock for rescue deal

Struggling holiday giant Thomas Cook is in a race to beat the clock as it seeks to secure a £900 million rescue package.

Friday, 6th September 2019, 12:23 pm
Thomas Cook.

The Peterborough-based travel operator is hoping to conclude the deal with Chinese investor Fosun and its debtholders before the winter season gets underway.

The company, which employs 1,000 people at Westpoint in Lynch Wood, has set itself an October deadline for agreement to be reached on the rescue deal.

The winter period is traditionally a time when tour operators struggle with cash flow.

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Peter Fankhauser, chief executive of Thomas Cook.

Under terms agreed so far, Fosun will inject £450 million in return for 75 per cent of the equity in the travel business and up to 25 per cent of the Thomas Cook airline.

Thomas Cook’s core lending banks and bondholders will put in another £450 million in return for up to 25 per cent of the tour operator and 75 per cent of the airline.

The action comes after Thomas Cook announced three profit warnings and then a £1.5 billion half year loss in June, blaming hot weather, Brexit and customers’ move to online bookings.

News of the pending deal got a mixed reaction from union officials.

Manuel Cortes, leader of travel trade union, TSSA, said: “This appears to be good news for our members as Thomas Cook’s presence on our high-streets looks to have been saved.

“Our main concern is ensuring our members’ jobs and their terms and conditions are protected. We are seeking an urgent meeting with Thomas Cook to gain the assurances our members need.”