Thomas Cook rescue deal on knife edge as bondholders rent advisers for a face off
Thomas Cook’s £750 million rescue deal with Chinese group Fosun is hanging within the steadiness after bondholders employed heavyweight advisers to face off with the corporate.
Sources mentioned bondholders had appointed advisers from US funding financial institution Houlihan Lokey, legal professionals from Milbank and arrange a committee forward of crunch negotiations with the 178-year-old journey agency and its lending banks.
On Friday, Thomas Cook surprised the market when it unveiled a debt-for-equity swap deal that will see conglomerate Fosun and its lending banks inject £750 million into the enterprise to stave off a collapse.
Thomas Cook surprised the market when it unveiled a debt-for-equity swap deal that will see conglomerate Chinese group Fosun and its lending banks inject £750 million into the enterprise
The group has been fighting a £1.9 billion debt pile.
The shares fell 7.8p – virtually 60 per cent – to five.38p after the announcement because it grew to become clear that traders could be left with little or no fairness.
Fosun, which owns a fifth of the shares, needs management of Thomas Cook’s tour working enterprise.
Under the deal, it will develop into the bulk proprietor and obtain a small stake within the agency’s airline.
Thomas Cook mentioned its financial institution lenders had been ‘supportive of the recapitalisation’, however mentioned it needed to attain settlement with different stakeholders, such because the bondholders.
One debt investor mentioned the truth that bonds did not plunge on Friday implied these traders could be prepared to approve the deal and develop into shareholders alongside Fosun and the lending banks.
Thomas Cook declined to remark.