Fosun Tourism Group to acquire 25% of Thomas Cook Airline and 75% equity of the same company’s tour operator.
Thomas Cook Group announced reaching a deal for a “significant” new capital investment and reorganization of the group on August 28, 2019. Fosun Tourism Group is to acquire 25% of the British charter and scheduled airline and 75% of the equity of the Group Tour Operator for £450 million.
Core lending banks and noteholders of Thomas Cook group will inject another £450 million and convert existing debt into equity of approximately 75% of the airline and 25% of the tour operator.
The agreement is expected to take force in October 2019.
Thomas Cook Group − a 178 years old company and the oldest travel agency still in activity − has been in a financial struggle for years due to the emergence of online holiday booking websites.
In 2017, Brussels Airlines overtook operations of Thomas Cook Airlines Belgium. In July 2018, reports emerged that the company could consider splitting its airline from the rest of operations and sell a stake to liberate some cash and repay debt. However, Peter Fankhauser, CEO of the Thomas Cook Group, denied the information at the time, by claiming that “While we are open to consolidation where it makes sense for our business, we have no current plans to sell our airline”.
Recently, Which? Travel rated Thomas Cook Airline as the worst in the UK in terms of delays. In 2018, approximately 11.5% of the airline’s flights arrived more than an hour late into the country. In a separate publication, Thomas Cook package holidays were ranked as having the worst customer satisfaction score of 69%, with one in four customers reported having encountered a problem on holiday.
Fosun Tourism Group is a leisure-focused integrated tourism group with headquarters in Hong Kong. The European Union law (which still applies to the UK until Brexit comes into force) requires air carriers to be majority-owned by EU shareholders.