Thomas Cook Group - Proposed recapitalisation of Thomas Cook Group
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014
Proposed recapitalisation of
Under the proposal, the Group is targeting an injection of
The recapitalisation proposal will require a reorganisation of the ownership of the Tour Operator and Airline businesses which is expected to result in Fosun owning a significant controlling stake in the Group Tour Operator and a significant minority interest in the
Existing shareholders will be significantly diluted as part of the recapitalisation. However, shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun and converting financial creditors on terms to be agreed.
This announcement results from the strategic review of the
As a result, the Board has concluded that it is in the best interests of all the Group's stakeholders to pursue a full recapitalisation of the Group supported by new investment into the business. The strategic review of the
The recapitalisation proposal is subject to certain conditions including performance conditions, due diligence, further discussions and reaching agreement with a range of company stakeholders (including the pension trustees, bondholders, other financial creditors and Fosun's shareholder approval), and receipt of any regulatory and anti-trust clearances or approvals.
The Group has also engaged in constructive discussions with bonding providers, and other critical financing partners to enable it to operate its business as usual through to the completion of the recapitalisation.
"After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the Board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks.
"While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees."
Current trading and outlook
The Summer 2019 programme is 75% sold, slightly ahead of the same period last year. Group Tour Operator bookings are down 9%, largely consistent with reductions in risk capacity to help support pricing, which is up 2%. While bookings in recent weeks have seen a marked improvement, reflecting the annualisation of the Summer 2018 heatwave, margins remain weak due to continued intense competition with high levels of promotional activity across all businesses.
Looking forward, it is clear that the trends experienced in the first half of the year have continued into the second half, reflecting an uncertain consumer environment particularly in the
The Group is helping to mitigate these challenges with a rigorous focus on cost, while remaining fully focused on delivering a stronger holiday offering to customers through high quality, higher-margin hotels, underpinned by a digital focus and market-leading innovation.
Forthcoming results dates
All future reporting dates, as previously disclosed, are now under review pending the outcome of the recapitalisation of the Group. As a result, the third quarter trading update originally scheduled for
Analysts & Investors:
| || |
+44 (0) 20 7557 6487
| || |
+44 (0) 20 7294 7023
| || |
+44 (0) 20 7294 7059
| || |
+44 (0) 20 7294 7203
| || |
+44 (0) 7799 894 265
| || |
+44 (0) 7782 398 418
This announcement contains forward-looking statements in respect of the Group and its recapitalisation plan. By their nature, these statements involve uncertainty, known and unknown risks and other facts and therefore assurance cannot be given that any particular expectation will be met. In particular, while the Company continues to work towards the implementation of the recapitalisation plan, there can be no assurance that the recapitalisation plan will be implemented unless and until agreements have been reached with several parties and until all conditions are satisfied.
This information is provided by RNS, the news service of the
Quick facts: Thomas Cook Group
Market Cap: -
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...FOR OUR FULL DISCLAIMER CLICK HERE