Agents have rallied behind Thomas Cook after the historic operator, Britain’s oldest travel firm, announced it had agreed “substantial” terms on a proposed rescue deal, potentially worth up to £900 million.
Cook’s largest shareholder, Chinese travel giant Fosun, will invest £450 million to acquire 75% of the group tour operator and 25% of the group airline, splitting the current group structure in two.
Its core lenders will aim to match Fosun’s investment, converting existing debt into about 75% equity in the group airline and 25% in the tour operator.
Cook hopes to implement the proposal in early October and says there will be no impact on trade creditors or customers.
The new agreement will supersede Cook’s £300 million winter cash facility announced in May, which will now lapse.
“A strong Cook is good for the whole industry,” said Idle Travel director Tony Mann.
“We need as many operators as we can, especially after Super Break disappeared. That created a lot of negative press, so it’s good to see Cook making more positive headlines.”
Jeanne Lally, joint managing director of Travel Bureau in Gosforth, said: “It’s really good for the industry. They are a great brand, and the last thing we need after Super Break is another legacy operator with so much heritage going bump – it’s a real confidence boost.”
Mark Swords, of Swords Travel, added: “They’re one of travel’s biggest suppliers so it’s encouraging news. There’s been a lot of scepticism around Cook, so this definitely puts things back on track.
“The biggest thing for us [after the deal] will be how they work with the trade.”
Meanwhile, the TSSA union, which represents Cook’s retail staff, said the deal appeared to be good news for members and Cook’s high street presence.
“Our main concern is ensuring members’ jobs and T&Cs are protected,” said general secretary Manuel Cortes, who added the union was seeking an urgent meeting with Cook.
Cook’s share price fell from 7p on Wednesday morning (28 August) when the rescue package was announced to about 5.5p when trading closed on Thursday (29 August) before falling further to 5.15p at close of play on Friday (30 August).
Cook added it could not guarantee its stock market listing would be retained upon completion of the proposed recapitalisation.
Group chief executive Peter Fankhauser admitted in July the proposed recapitalisation would “significantly dilute” existing shareholdings in the business, although the operator has since stressed shareholders could yet be invited to participate in the recapitalisation process.