Thomas Cook has just “days” to secure an additional £200 million of standby funding or risk collapse.

Thomas Cook’s lending banks led by Royal Bank of Scotland and Lloyds are demanding the contingency funding to ensure it can get through the quiet winter period.

Lenders are due to vote on a proposed £900 million rescue deal on September 27 after the key terms were agreed at the end of August, but Travel Weekly understands the travel giant needs to find the funding within days or risk collapse.


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Thomas Cook’s share price fell by more than 15% after it issued a statement on Friday morning in response to intensifying consumer media speculation over its future.

“Thomas Cook Group notes the recent media speculation regarding its proposed recapitalisation.

“Discussions to agree final terms on the recapitalisation and reorganisation of the company are continuing between the company and a range of stakeholders, including its largest shareholder, Fosun Tourism Group and its affiliates, the company’s core lending banks and a majority of the company’s 2022 and 2023 senior noteholders.

“These discussions include a recent request for a seasonal standby facility of £200 million, on top of the previously announced £900 million injection of new capital.

“The recapitalisation is expected to result in existing shareholders’ interests being significantly diluted, with significant risk of no recovery.

“The company will provide further updates in due course.”

A source close to the negotiations previously told The Times: “We are rapidly approaching an insoluble impasse precipitated by the banks’ demand for another £200 million of headroom. RBS are pushing hardest, so you could end up with a state-owned bank landing another government department with the cost of repatriating thousands of holidaymakers, not to mention dealing with the fallout from 9,000 UK job loses.

“Just when we thought we were there, Thomas Cook is having to scrabble around trying to underwrite £200 million it does not need.

“It would only be needed in a worst-case scenario such as a hurricane in the Canary Islands, a terrorist attack or if the pound sunk to a record low. The irony is that, in seeking to ensure the business can survive the winter, RBS may end up tipping it over the edge.”

The proposed Fosun-led deal would see the Chinese conglomerate inject £450 million while banks and lenders match that with a debt for equity swap.

Fosun would take a 75% stake in Thomas Cook’s tour operating and hotel division and a 25% stake in its airlines.

If Thomas Cook were to collapse, it would affect an estimated 150,000 UK holidaymakers and more than 500,000 customers in overseas source markets.

Concerned Thomas Cook customers have been contacting the travel group to check if flights and package deals are still going ahead, and it has been reassuring customers on social media.

Thomas Cook faces a second challenge from a group of bondholders who have threatened to vote against the deal unless they are guaranteed insurance payouts.


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