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Published on Monday, September 16, 2019

Thomas Cook in 'last-minute talks' to seal rescue deal



Thomas Cook has said it is 'focused on completing' its rescue deal package with Chinese company Fosun.





The operator issued a statement after a flurry of reports suggesting the deal was in doubt, because some lenders could vote against the terms of the agreement, the Times said.


The Times reported Thomas Cook was in last-minute negotiations with bondholders to approve the takeover. The deal needs the backing of three quarters of bondholders to succeed.


The Civil Aviation Authority is not commenting on reports it is preparing for the possible collapse of the rescue deal. Thomas Cook's ATOL is due for renewal on October 1.


OAG data shows 486,000 passengers are due to travel on Thomas Cook flights in the first week of October, reports say.


The Times said the CAA 'is on alert over the health of the airline and tour business, which serves about 22m customers a year. Its planning is believed to include the possibility of having to repatriate hundreds of thousands of passengers stranded abroad'.


The Telegraph reports Thomas Cook has 'lined up insolvency experts from advisory firm AlixPartners, which is on standby should rescue talks with Chinese conglomerate Fosun and a clutch of lenders fail'.


"AlixPartners has been working with Thomas Cook on tackling its debt pile," the Times added.


"In a court filing last month, AlixPartners said Thomas Cook's lenders, which include Lloyds Bank, could receive just 13.2% of the £875m they are owed should the company collapse."

Thomas Cook has not commented on a report in the FT, which said the operator is 'likely to move to gain more time to conclude negotiations by appealing to a court to push back the meeting of bondholders that had been arranged for Wednesday'.


On Friday, Thomas Cook reportedly asked lenders for a further £100 million in addition to the £900 million already on the table.

A City source told Sky News that Thomas Cook thought it unlikely it would need to draw on the additional £100 million, but the extra funding was needed to reassure investors.


In a statement, Thomas Cook said: "We announced on 28 August that we have reached substantial agreement with Fosun and our creditors regarding key commercial terms of the recapitalisation of Thomas Cook.


"We remain focused on completing the transaction."


The CAA said: "We are in regular contact with all large ATOL holders and constantly monitor company performance. We do not comment on the financial situation of the individual businesses we regulate."


 

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