Home Thomas Cook and Fosun Agree to Terms on Rescue Deal to Save the Former
News

Thomas Cook and Fosun Agree to Terms on Rescue Deal to Save the Former

Ali Raza

Thomas Cook, a widely known global travel group, isn’t having the best of weeks. The company confirmed in recent hours the details of the £900m rescue deal that will provide Fosun, a Chinese conglomerate, full control of its holiday business.

However, Thomas Cook clarified that its shares might be pulled from the London Stock Exchange market as a consequence of the agreement.

Terms of the Pact

Fosun and Thomas Cook agreed to terms to a deal that will see the former inject considerable capital, specifically £450mm into the latter. In exchange, Fosun will receive a 75 percent stake of the package tour division of the British firm, plus a 25 percent holding in its airline department.

For those regularly checking their stock trading apps following the development of the news, Thomas Cook’s stock fell despite the announcement of the rescue plan. However, only a few hours have passed and it seems premature to jump into conclusions.

Per the terms of the pact, Fosun will have another foothold in the European market. The Shanghai-based company already has businesses there, including the holiday resort chain Club Med and a club in the English Premier League football club: the Wolverhampton Wanderers. Additionally, it maintains an 18 percent stake in Thomas Cook.

Thomas Cook’s financial institutions and bondholders will take care of the other £450m and will take the remaining stake in the tour operator and a 75 percent stake in the airline business.

The British firm hopes that the investment plan is completed by the early part of October, and its primary objective is to prevent bankruptcy ahead of the winter, the moment of the year in which holiday bookings are low.

A Possible Cancellation of the Listing

The company, however, issued a warning: the new owners might cancel publicly traded shares and make the company fully private without notice in advance. Thomas Cook also stated that the pact had the potential of lowering other investors’ shares value.

In a stock market announcement, Thomas Cook explained that the primary intention at the time is to keep the company’s listing, but that the current recapitalization plan may result in the cancellation of that listing.

Thomas Cook has been stumbling ever since it nearly collapsed in 2011. Some attribute the situation to stiffer competition from online platforms, while others point out at specific, one-time events, such as Brexit, as other possible causes. Jet fuel prices have also increased, as have hotel costs.

A £1.5bn loss in the first half of the financial year was reported in May, and that was a sign of things to come.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission on real stocks

Rating

64 traders signed up today

Visit Now

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account

Ali Raza

Ali Raza

A journalist, with experience in web journalism and marketing. Ali holds a master degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.