Thomas Cook has confirmed a meeting to agree the terms of a £1.1 billion rescue package with lenders has been pushed back until the end of September.
A vote was due to take place this Wednesday but the travel giant has secured more time to negotiate with a group of bondholders which is feared might block the deal.
This group of bondholders is concerned the scheme might not trigger payouts on CDS – which act like an insurance on an investment.
Cook is seeking to reorganise its debt to trigger losses for bondholders which would lead to CDS paying out. However, this is not guaranteed.
Podcast: Thomas Cook rescue deal
It is understood this group of bondholders is expected to have control of over 25% per cent of the bonds required to vote down the deal.
Under the proposed terms, Fosun, which owns 18% of Thomas Cook, will control 75% of the company’s tour operating business and up to 25% of its airline in exchange for a £450 million capital injection.
Debt holders and lending banks have agreed to put up the remaining £450 million in exchange for control of Thomas Cook’s airline and up to 25% of the tour operator.
A statement from Cook said: “As part of the process to finalise the full commercial terms between Thomas Cook Group’s creditors and stakeholders, the Scheme Meetings and the Schemes Sanction Hearing relating to Thomas Cook Group’s proposed recapitalisation will take place on the 27 and 30 September respectively.
“The Company continues to target implementation of the recapitalisation in early October.”
Cook stressed there could be “no assurance” the plan will be implemented.
A source close to the restructuring told The Times that Fosun was “very committed” to the deal.
Howver, the negotiations were described as being “a high-wire act…It’s pretty precarious, though the odds are still in favour of a deal. I’d say there was a 70% chance of it going through.”
Cook’s Atol licence is due to be renewed on October 1.
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