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Thomas Cook enlists China’s Fosun to salvage oldest travel firm

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HONG KONG/LONDON:Thomas Cook is negotiating a £750 million ($941 million) rescue that will give Fosun Tourism, its biggest investor, control of the indebted British group’s package-tour business, in a blow to other shareholders.


The company’s shares fell more than 45 per cent to their lowest-ever level on news of the proposal, which would give Club Med owner Fosun a minority stake in Thomas Cook’s airline business.


“This comes at a cost, with a significant dilution for existing shareholders,” Chief Executive Peter Fankhauser said, adding it was a “pragmatic and responsible solution to secure the future of the Thomas Cook business and brand”.


Fosun International, co-founded by billionaire Guo Guangchang and one of China’s biggest conglomerates, has spent billions of dollars over the past decade on healthcare, tourism and fashion companies in the United States and Europe.


“We are committed investors, with a proven track record of turning around iconic brands including Club Med and Wolverhampton Wanderers FC,” Hong Kong-listed Fosun, which already owns an 18 per cent stake in Thomas Cook, said.


Thomas Cook said that the cash from the proposed deal, which would mark one of the most significant purchases of a British company by a Chinese group in years, would be enough for it to trade over the winter season and give it flexibility to invest.


The world’s oldest travel company, which has been hit by fading demand for its package holidays, high debt and a hot 2018 summer in Europe, has also been weighing approaches for its airline business and Nordic operations. Fankhauser said the sale of the airline business was paused while Thomas Cook focused on the refinancing, adding it was “too early to speculate on what will happen on the airline review”. — Reuters


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