British government plays down bailout chances for Thomas Cook
September 22 2019 06:04 PM
Pedestrians are pictured walking past a branch of a Thomas Cook travel agent's shop
Pedestrians are pictured walking past a branch of a Thomas Cook travel agent's shop


The British government appeared to play down the chances of a bailout for troubled travel firm Thomas Cook as company representatives met major shareholders and creditors on Sunday in a last-minute search for funds.

The firm, marketed as the world's oldest tour operator, has said it needs 200 million pounds (250 million dollars) to fund ‘a seasonal standby facility’ in addition to a previously announced 900-million-pound injection of new capital.

The Financial Times reported on Saturday that Thomas Cook had asked the government for a last-minute bailout.

‘We are not commenting on those two points,’ a Thomas Cook spokesperson said when asked about Sunday's talks and the request for a bailout.

Foreign Secretary Dominic Raab hinted that Prime Minister Boris Johnson's Conservative government was unlikely to intervene to save the firm.

‘We don't systematically step in ... unless there is a good strategic national interest for doing so,’ Raab told the BBC.

Raab said he was aware that meetings were ‘ongoing’ between Thomas Cook and creditors and shareholders on Sunday, amid expectations that the company will make a statement to the London stock market by early Monday.

‘We're making sure that all of the contingency planning is in place,’ he said, adding that the government had ‘learnt lessons’ from the collapse of budget airline Monarch in 2017.

Thomas Cook said earlier that it was ‘in discussions to agree final terms on the recapitalization and reorganization of the company... [with] a range of stakeholders.’  The stakeholders involved in the talks included the largest shareholder, China's Fosun Tourism Group; the group's affiliates; and Thomas Cook's ‘core lending banks,’ the company said in a statement.

The recapitalization is expected to ‘result in existing shareholders' interests being significantly diluted, with significant risk of no recovery,’ it said.

Responding to concerned customers on Twitter on Sunday, the company said it was still ‘operating as normal.’  An estimated 600,000 customers, including up to 160,000 from Britain, are currently on holiday with Thomas Cook. The company employs some 9,000 people in Britain, the BBC said.

Staff at a hotel used by Thomas Cook in Tunisia had tried to prevent tourists leaving in order to fly home, the broadcaster reported, posting a video of one woman who described herself as being held ‘hostage’ by the hotel.

Andy Burnham, the opposition Labour party's mayor of Manchester, said he was ‘extremely concerned about the future of Thomas Cook, its customers and staff - more than 3,000 of whom are based in Greater Manchester.’  The Thomas Cook group includes several airline businesses and a hotel brand.

‘I understand that the airline is viable and that there is a rescue package that can be done. But time is running out,’ Burnham said in a statement on Sunday.

He urged Johnson to ‘intervene today and do all he can today to save this great name of the British high street.’

There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*