04 June 2009

Thomas Cook major shareholder asks for financial bail out

The major shareholder in Thomas Cook has warned that it could go into administration unless the German government bails it out.

Arcandor has a 52.8% stake in Thomas Cook and has asked for emergency loans, blaming the downturn for its cash crisis.

But the German government as well as the European Commission have indicated that those loans won’t be forthcoming because they believe Arcandor’s misfortunes predate the recession.

A spokesman for Thomas Cook, however, told Travelmole: "Arcandor is not a brand that people know in the UK and so the media here are linking it with Thomas Cook, which is. Arcandor is not our parent company and we are not associated with its financial business at all. Thomas Cook is an independent company listed on the London Stock Exchange and we are completely ring-fenced with totally different credit lines."

Arcandor has asked the German government for 650m euros (£561m) of loan guarantees, and a direct credit line of 200m euros.

Although it is believed that the German government may refuse the loans from its recession fund, it may choose to help the ailing firm from other pots. In the meantime it has called on Arcandor’s main share holders to shore up the firm financially.

By Dinah Hatch