Thomas Cook approached government for a £200m bailout

Thomas Cook has approached the UK government for a bailout to save itself from collapse after its lenders threatened to pull out of a proposed rescue deal. The travel group  was locked in talks yesterday with multiple potential investors which include the government providing a lifeline of £200m as part of the demand from its banks for extra cash  and £1.1m recapitalisation. A state bailout would save the government millions of pounds should it need to fly home 150, 000 stranded holidaymakers.

If Thomas Cook dos not find the funds it risks going into administration, which could trigger Britain’s biggest peacetime repatriation.

The failure of Thomas Cook would have severe impact across the travel sector with over 3, 000 hoteliers around the world working closely with the group.  

Thomas Cook had been in the process of negotiating a £900m rescue package that would result in Fosun taking control of it tour operating arm and a minority stake in its airline for £450m of capital and the other £450m would be put up by the lenders and debtholders which would take control of its airline.

Royal Bank of Scotland and Lloyds have threatened to withdraw support following advice that the travel company could face collapse by November 2020 unless it had access to an extra £200m standby loan.