LONDON: EmbattledUK travel firm Thomas Cook on Friday sought a further emergency capitalinjection, seeking to stave off a collapse that could trigger Britain's largestrepatriation since World War II. Thomas Cook said in a statement that it needed£200 million ($250 million, 227 million euros) -- in addition to the£900-million rescue deal secured last month that handed control of its touroperator business to Chinese peer Fosun.
Sources said acollapse of the group, which some reports said could come as soon as theweekend, would mean the repatriation of 600,000 tourists, including 150,000seeking government help returning to the UK. "We can confirm that acontingency plan exists to deal with this situation," Richard Taylor,spokesman for Britain's Civil Aviation Authority told AFP.
"We cannotdiscuss the details of this plan but we have run similar operations in thepast." The 178-year-old company has approached a range of potentialinvestors including the UK government, a source close to the matter told AFP,confirming a report in the Financial Times. Two years ago, the collapse ofMonarch Airlines prompted the British government to take emergency action toreturn 110,000 stranded passengers, costing taxpayers some £60 million onhiring planes. The government at the time described it as Britain's"biggest-ever peacetime repatriation".
'Risk ofcollapsing'
A freshrecapitalization for Thomas Cook "is expected to result in existing shareholders'interests being significantly diluted, with significant risk of norecovery", the company said Friday. Shares in Thomas Cook, which havecollapsed already in recent months, lost around 23 percent of their value onFriday, standing at just 3.4 pence. "The travel group is at risk ofcollapsing if it doesn't receive the financing," noted David Madden,analyst at trading group CMC Markets UK.
Thousands ofworkers could also lose their jobs, with Thomas Cook employing about 22,000staff worldwide, including 9,000 in Britain. Fosun, which was already thebiggest shareholder in Thomas Cook, agreed last month to inject £450 millioninto the business. In return, the Hong Kong-listed conglomerate acquired a75-percent stake in Thomas Cook's tour operating division and 25-percent of itsairline unit.
Creditors andbanks agreed to inject another £450 million under the recapitalization planannounced in August, converting their debt in exchange for a 75-percent stakein the airline and 25 percent of the tour operating unit.
Announcing Fridaythe need for more funds, Thomas Cook said: "Discussions to agree finalterms on the recapitalization and reorganization of the company are continuingbetween the company and a range of stakeholders, including its largestshareholder, Fosun Tourism Group."
Thomas Cook inMay revealed that first-half losses widened on a major write-down, caused inpart by Brexit uncertainty that delayed summer holiday bookings. The group,which has around 600 stores across the UK, has also come under pressure fromfierce online competition. - AFP