Thomas Cook delays crunch bondholder meeting over rescue deal
Troubled travel firm Thomas Cook has secured more time for bondholders to agree to a £1.1bn rescue deal, with a crunch meeting now scheduled for next Friday.
But shares fell further today after yesterday’s update to investors, dropping 3.6 per cent to just 4.5p.
In the update, Thomas Cook said: “As part of the process to finalise the full commercial terms between Thomas Cook Group’s creditors and stakeholders, the scheme meetings and the schemes sanction hearing relating to Thomas Cook Group’s proposed recapitalisation will take place on the 27 and 30 September respectively.”
Read more: Thomas Cook in stand-off with pension scheme trustees
The company still hopes to complete the deal led by major shareholder Fosun in early October.
The 178-year-old holiday firm is scrambling to wrap up the terms of a restructuring deal with Fosun’s Chinese conglomerate, but fears have grown that it may not win the support of three-quarters of its bondholders needed for the rescue to go through.
Some bondholders have bet against the company’s debt via credit-default swaps – contracts that pay out if the company defaults on its debt. They are reportedly looking for an agreement that ensures they get paid for their positions – and may vote against anything that does not do this.
In August, Thomas Cook published details of the rescue plan, which will see Fosun pour £900m into the company to help it avoid bankruptcy as it heads into the winter season when holiday bookings are at their nadir.
Read more: Thomas Cook ‘scrambles to seal rescue deal’ amid concerns over bondholders
Thomas Cook reported a £1.5bn half-year loss in May, and is struggling with a £1.4bn debt pile. It has struggled in the face of economic uncertainty over Brexit, rising prices of jet fuel and hotels pushing up their costs in recent years.
The firm also ran into difficulties last summer as a Europe-wide heatwave convinced holidaymakers to stay at home rather than booking a package deal abroad.