Equity investors in Thomas Cook Group PLC (LON:TCG) will be hit with significant dilution as part of a £900mln cash injection from major shareholder Fosun and the travel group’s other lenders.
Chinese colossus Fosun has agreed to pay £450mln to acquire “at least 75%” of the equity of the tour operator business and 25% of the airline.
Aiming for completed in early October, the group’s banks and bondholders will also pay the same amount to buy “approximately 75%” of the airline and up to 25% of the tour operator.
Thomas Cook confirmed that existing shareholders will be “significantly diluted” and that, while directors intend to retain it, the London stock market listing may be cancelled “in certain circumstances”.
The expiry of a £300mln secured bank financing facility, which had been announced in May, will be allowed to lapse.
The proposal remains subject to a long list of conditions and approvals.
Thomas Cook shares fell 15% to 6.0p on Wednesday morning, though they have been lower in recent weeks.