UK Politics

Thomas Cook to hold final rescue talks on Sunday morning


Thomas Cook Group will meet its biggest shareholder and creditors on Sunday morning in a final attempt to piece together a rescue deal before the 178-year-old company collapses into insolvency.

Sky News has learnt that a meeting has been scheduled at the offices of the City law firm Slaughter & May in a bid to buy Thomas Cook enough breathing space to stave off administration.

The company needs to secure a £200m lifeline following a demand from its lenders, or face being placed into bankruptcy proceedings in the early hours of Monday morning.

What would happen to UK holidaymakers if Thomas Cook shuts down?

Such a move would trigger Britain's biggest-ever peacetime repatriation operation, involving approximately 165,000 holidaymakers who will need to be flown back to the UK.

The Civil Aviation Authority is leading the exercise, which has been code-named Project Matterhorn.


A source close to the situation said the meeting at Slaughter & May was aimed at finding a way to salvage the rescue deal being led by Fosun Tourism Group, the owner of Club Med, which has pledged to provide half of a £900m financing package to keep Thomas Cook afloat.

In recent days, the London-listed company has explored a multitude of options to raise the remaining £200m required by its banking syndicate.

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Many of those have been discounted because there is insufficient time to implement them before Thomas Cook runs out of money.

A plan for Triton Partners to buy Thomas Cook's Nordic operations was still under discussion on Saturday, as was a proposal to keep its airlines in the UK, Germany and northern Europe out of administration while letting its British tour operating arm fail.

However, one insider suggested that neither was likely to be viable.

A separate discussion between the company and CQS Management, the hedge fund, to provide a chunk of the £200m additional funding has also been aborted in the last fortnight.

There remained, however, a glimmer of hope that the government's likely refusal to provide direct funding to keep Thomas Cook afloat could yet prompt creditors to find a solution of their own.

Thomas Cook's syndicate of more than a dozen bank lenders has been criticised by unnamed sources for demanding the additional £200m of standby funding to see the company through tough winter trading – a demand revealed by Sky News last week.

People close to the situation have said, though, that blaming Royal Bank of Scotland, one of the biggest lenders to Thomas Cook, was "a ludicrous position" given the travel group's frequent revision of its future financing needs during the last six months.

A request for emergency government funding was made by Thomas Cook earlier this week, with executives arguing that the cost to taxpayers would be dwarfed by the bill incurred by the repatriation.

One insider described the widely reported £600m tab, however, as being "a gross overestimate of the cost to taxpayers".

A sign is pictured above a branch of a Thomas Cook travel agent's shop in London on July 12, 2019. - China's Fosun Group is considering nearly a billion dollar rescue of embattled British tour operator Thomas Cook, the Hong Kong-listed conglomerate confirmed Friday. The Chinese company said in a stock market announcement that there are "ongoing advanced discussions" about a capital injection which would see a debt-for-equity swap at the British travel agency, which has struggled with its debt pile. (Photo by Tolga Akmen / various sources / AFP)        (Photo credit should read TOLGA AKMEN/AFP/Getty Images)
Image: The travel company is entering final talks for a rescue package

Sky News revealed on Thursday that Thomas Cook, which was founded in 1841, was expected to crash into administration as soon as Sunday night unless the missing £200m funding gap could be filled.

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