10 June 2009

Thomas Cook 'not affected' by major shareholder insolvency

Thomas Cook has issued reassurance that it will not be impacted by majority shareholder Arcandor applying to commence insolvency proceedings.

Today's announcement will have no impact on customers and is not expected to result in any adverse effect on any of the contractual arrangements of the Thomas Cook group, a company statement said.

Germany department store and mail order firm Arcandor AG is a 52.8% shareholder in the travel giant. It filed for administration after the German government refused a bid for state aid and an emergency loan.

Thomas Cook said it would "closely monitor" what happens to Arcandor's shareholding.

But the group confirmed that it has not had any approach and is not in any discussions in relation to the acquisition of the Arcandor stake or a potential offer for the company.

Thomas Cook said it financing arrangements are "completely independent" from Arcandor's financing and are not affected by the development.

Thomas Cook has been operated as a standalone entity, separate from the Arcandor group.

"As a result, there are minimal balances outstanding between the two groups," Thomas Cook said.

Trading balances owed by the Arcandor group to the Thomas Cook group arising in the ordinary course of business are less than £1 million.

"There are no non-trading balances owed by the Arcandor group to the Thomas Cook group. There are no cash pooling arrangements between the Thomas Cook group and the Arcandor group and the Thomas Cook group has not guaranteed any obligations of Arcandor," the statement said.

Thomas Cook CEO Manny Fontenla-Novoa said: "We are saddened by the news announced today by Arcandor.

"Dr Karl Eick and his colleagues have worked tirelessly to address their financial difficulties and Arcandor has been a constructive and supportive shareholder of our business.

"Arcandor's insolvency has no impact on Thomas Cook's financial position or its operational performance, nor on its management and staff.

"We remain as a completely independent and separate business, ring-fenced from Arcandor.

"There is no impact whatsoever on our aircraft or our hotel relationships, nor on the holidays that we provide to our customers.

"It remains very much business as usual at Thomas Cook."

by Phil Davies