Thomas Cook: shares dive as recapitalisation plan worries
(CercleFinance.com) - Shares in Thomas Cook plunged more than 35% on Friday as investors were sceptical about its plan to get fresh money for China's Fosun, as part of a recapitalisation and separation plan.
Under the deal, the British travel company would obtain an injection of 750 million pounds of new money, which should provide sufficient liquidity to trade over the winter 2019/20 season and to invest in future projects, it said.
The deal will also require a reorganisation of Thomas Cook, with Fosun set to take a controlling stake in the group's tour operator business and a significant minority interest in the airline division.
The deal means that the strategic review of the airline business is paused, pending the outcome of the recapitalisation.
More importantly, existing shareholders will be "significantly diluted" Thomas Cook warned, prompting a 35% fall in the shares. They have lost more than 90% over the past year.
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