Thomas Cook Rescue triggers listing risk

The 179-year-old travel group has agreed terms of a  £900m rescue deal with debtholders and China’s Fosun that aims to save the business but could lead to it being pulled from the stock market.

According to the deal Fosun would inject £450m into Thomas Cook in exchange for at least 75 per cent of the equity in its travel business and up to 25 per cent of its airline. Its core lending banks and bondholders would put in the same amount of money for the other parts of the business- up to 25 per cent of the tour operator and 75 per cent in October. The company aims to complete the deal before the winter season –when tour operators traditionally struggle with cashflow.

Thomas Cook confirmed that while existing shareholders could retain an investment their holdings will be “significantly diluted as part of the deal. ”The current intention of the board is to maintain  the company’s listing . But the implementation of the proposed recapitalisation may in certain circumstance  result in cancellation of the company’s listing.”

Thomas Cook’s shares were down  16.7 per cent yesterday. The company lost more than 90 per cent of the market value over the past year. Shares have been trading at about 7p for the past month despite being boosted by the purchase of 8 per cent stake in the company by Neset Kockar CEO of Turkish holiday group Anex Tour. MrKockar is now the travel group’s second largest shareholder after Fosun.

If Thomas Cook maintained its market listing it would be under a scenario similar to that of model-train maker Hornby who is still publicly listed despite being 90 per cent owned by the asset managers  Phoenix and Artemis.

Fosun is also majority shareholder in Wovlerhampton Wanderers Football Club  and French resort operator  Club Med.