Thomas Cook set for last-ditch rescue talks today as MPs urge ministers to step in

Labour has demanded that the government step in and help rescue the once-nationalised holiday company

Simon Calder
Travel Correspondent
Sunday 22 September 2019 01:12 BST
Comments
If the deal falls apart, 150,000 British holidaymakers will need to be repatriated
If the deal falls apart, 150,000 British holidaymakers will need to be repatriated

Britain’s original package-holiday company will begin the most critical negotiations in its 178-year history at 9am on Sunday morning.

Thomas Cook, which is heavily in debt and seeking refinancing, will meet its lenders and the Chinese conglomerate, Fosun, at the City law firm Slaughter & May.

A consortium of banks, led by RBS, had agreed to pump £450m into the ailing travel firm, in a debt-for-equity swap that would see them take a 75 per cent stake in Thomas Cook Airlines.

The remaining 25 per cent would go to Fosun, which is the largest shareholder in Thomas Cook with 18 per cent of the equity.

Fosun would pay in a further £450m and take 75 per cent of the rest of the business.

But the banks are now demanding that Thomas Cook arrange an extra £200m financing facility to see the firm through what is expected to be an extremely tough winter for the UK travel industry.

If the deal falls apart, Thomas Cook could fail within days, requiring 150,000 British holidaymakers to be repatriated.

The Transport Salaried Staffs’ Association (TSSA), which represents a number of head-office and travel agency staff at the company, has written to the business secretary, Andrea Leadsom, demanding an urgent meeting about the rescue.

The general secretary, Manuel Cortes, said: “It is incumbent upon the government to act if required and save this iconic cornerstone of the British high street and the thousands of jobs that go with it.

“Thomas Cook can be a highly successful business and must be given every opportunity to flourish.

“No British government in its right mind would countenance the loss of so many jobs and the prospect of just one major travel operator – TUI – controlling the mass market.” The shadow business secretary, Rebecca Long Bailey, said: “This is yet more evidence of this government’s indifference to British jobs and businesses going under.

“All viable options must be explored by Thomas Cook and the government must consider stepping in and taking an equity stake to avoid this crisis.”

Foreign secretary Dominic Raab refused to say whether government money would be made available to help the company.

Mr Raab told BBC1's Andrew Marr Show: "We don't systematically step in with taxpayers' money when businesses are going under, unless there's a good strategic national interest for doing so.

"But I don't want to undermine the talks that are going on. We'd love to see it continue as a going concern.

"Obviously people want to know that there's some reassurance that the contingency planning has been done, and of course we are doing that."

Thomas Cook was nationalised between 1948 and 1972.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in