Thomas Cook collapses as rescue attempts fail

Thomas Cook Group PLC (LON:TCG) has gone bust after a last-ditch attempt to secure a rescue deal for the world’s oldest travel agent collapsed over the weekend.

The group had seemed to be close to securing a £900mln rescue deal for its tour operator and airline businesses, propped up by a £450mln cash injection from its largest shareholder, Chinese giant Fosun, and a consortium of banks and other lenders.

READ: Thomas Cook confirms need for extra £200mln as it teeters on brink of collapse

However, the agreement was thrown into doubt on Friday after a number of banks, led by Royal Bank of Scotland PLC (LON:RBS) and Lloyds Banking Group PLC (LON:LLOY), demanded Thomas Cook find an extra £200mln to keep itself afloat over the traditionally quieter winter period.

This proved to be too much for the company, which on Monday announced to the market that it would enter liquidation proceedings, putting 22,000 jobs at risk worldwide and leaving around 150,000 customers stranded abroad.

Peter Fankhauser, Thomas Cook’s chief executive, said it was a matter of “profound regret” that the company had been unsuccessful in securing a rescue deal, adding that the additional funding demanded last week had proved an “insurmountable” challenge for the 178-year old business.

“I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years”, he added.

The company’s shares were suspended from the main market with immediate effect.

Shares in tour operator Tui AG (LON:TUI) were 7% higher to 902.6o on Monday, while those in online specialist On The Beach Group PLC (LON:OTB) were down 2% to 373.8p.

Among the airlines, easyJet PLC (LON:EZJ) was up 5% to 1,112p, Ryanair was up 4% to €10.36, British Airways owner International Consolidated Airlns Grp SA (LON:IAG) was up 1% to 482p.

Story by ProactiveInvestors