Sep 20, 2019
Thomas Cook has ‘matter of days’ to avoid collapse
Thomas Cook is racing against time to find an additional £200m to secure a rescue deal that would save it from collapse. If Thomas Cook does not find the funds, it risks going into administration - a collapse that would trigger Britain's biggest ever peacetime repatriation to fly back 150,000 stranded UK holidaymakers and 350,000 tourists from other countries, mostly Germany. The debt-for-equity swap involves Fosun contributing £450m, the banks £300m and the debtholders £150m. However, Thomas Cook's two main banks, Royal Bank of Scotland and Lloyds, threatened to withdraw their support at a meeting on Monday following advice that the travel company could face collapse by November 2020 unless it had access to an additional £200m standby loan. Brian Strutton, general secretary of the pilots' union Balpa, said that "If Thomas Cook goes into administration it will cost the taxpayer as much to repatriate holidaymakers as it would cost to save Thomas Cook". A further stumbling block to the success of a deal could come on Monday when a committee decides whether bankruptcy proceedings filed by Thomas Cook in the US would trigger payouts on credit default swaps held against the company's debt.
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