Fears for travel firm’s collapse

 

There are fears for one of the UK's biggest travel firms, Thomas Cook, which is teetering towards a collapse that would strand thousands of travellers worldwide and trigger Britain's biggest peacetime repatriation.

The cash-strapped company has been ordered to find an extra $375 million in contingency funding to secure an emergency rescue deal.

Chinese firm Fosun had agreed to backing a $1.6 billion refinancing but Thomas Cook's lenders have ordered it to cough up the extra money as a contingency to see it through winter.

Without the rescue led by Fosun, the company is likely to collapse, the BBC reported.

That would leave about 150,000 British holiday-makers stranded worldwide, and they would need to be repatriated by the UK government at a cost of about $1.1 billion.

It would be the largest repatriation outside wartime in Britain's history, according to The Sun.

The collapse of Thomas Cook would also see the loss of 22,000 staff worldwide.

Thomas Cook, which at 179 years old is the UK's oldest travel provider, serves about 19 million customers a year in 16 countries.

The British firm includes tour planning operations and airlines. Picture: Tomas Del Coro
The British firm includes tour planning operations and airlines. Picture: Tomas Del Coro

Its recent financial strife has been attributed to tough competition from online operators, the high price of jet fuel, concerns over Brexit, political turmoil in destinations such as Turkey, and summer heatwaves that discouraged customers from travelling.

In May, Thomas Cook reported a $2.8 billion loss for the first half of the year, the BBC reported.

It published details of a planned restructure in August, which included a $830 million cash injection from Fosun in return for a majority stake in Thomas Cook's tour-operating business and airline. Fosun is a majority shareholder in resort operator Club Med.

A final vote on the deal was due to take place this week but has been delayed until next Friday in light of the demand for extra funding.


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