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Thomas Cook: secures 900 million pound recapitalisation

(CercleFinance.com) - British leisure travel group Thomas Cook said it has secured 900 million pounds (about 1 billion euros) in new cash as part of its recapitalisation plan.

Under the terms of the deal, the Chinese conglomerate Fosun - operator of the Club Med holiday chain - will contribute 450 million pounds of new money by acquiring at least 75% of the group's tour operator business and 25% of its airline.

The company's lending banks and senior noteholders will add an aggregate 450 million pounds of new cash by converting their existing debt into approximately 75% of the group's airline business and up to 25% of its tour operator activities.

Unsuprisingly, the recapitalisation is expected to result in existing shareholders' interests being significantly diluted, Thomas Cook said.

While the company's current intention is to remain listed, the the implementation of the recapitalisation in October may result in the cancellation of the company's listing, it warned.

Investors reacted badly to the news, with the shares dropping a further 14% at 6.1 pence. They have fallen by 80% so far this year.

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