Thomas Cook On Brink Of Collapse And Could Leave 180,000 Tourists Stranded
Travel company Thomas Cook could go bust as early as Sunday, leaving thousands of tourists stranded.
The 178-year-old travel company's banks are demanding £200 million ($251 million) to secure its future and the firm has told shareholders there is a 'significant risk of no recovery'.
The operator was hoping to secure a rescue package with their biggest shareholder, Fosun, but its banks are insisting it needs the hefty contingency funds to fall back on during winter.
If the company were to go under by Sunday, as many as 180,000 tourists would be left stranded abroad, according to the Daily Mail.
It would also scupper the plans of thousands more who have booked holidays with the company. Those who have purchased package holidays with Thomas Cook will receive a full refund if their holiday doesn't go ahead, as such packages are ATOL protected. However, those who just purchased flights with the airline will not benefit from such protection.
In May, the company recorded a £1.5bn ($1.88bn) loss for the first half of the year and has struggled to reduce its debts, citing political unrest in popular holiday destinations, a UK heatwave and Brexit as potential factors.
The firm employs 22,000 staff - 9,000 of which are based in the UK - and serves 19 million customers a year in 16 different countries.
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In a statement, Thomas Cook said: "Thomas Cook Group plc notes the recent media speculation regarding its proposed recapitalisation. Discussions to agree final terms on the recapitalisation and reorganisation of the company are continuing between the company and a range of stakeholders, including its largest shareholder, Fosun Tourism Group and its affiliates, the company's core lending banks and a majority of the company's 2022 and 2023 senior noteholders.
"These discussions include a recent request for a seasonal standby facility of £200 million, on top of the previously announced £900 million injection of new capital.
"The recapitalisation is expected to result in existing shareholders' interests being significantly diluted, with significant risk of no recovery.
"The company will provide further updates in due course."
The airline has also been reassuring concerned customers on Twitter.
In one reply, the airline said: "There is nothing to be concerned about, Thomas Cook is here to stay. The media speculation has no impact on our customers or the operations of our business."
Another tweet read: "We are working on recapitalisation plans to provide financial stability for our company. The media surrounding us over the past few days has no impact on our customers holidays or the operations of our business."
According to the BBC, an RBS spokesperson said: RBS said: "As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook."
Featured Image Credit: PA