* Firm hit with demand from lenders for underwritten funds
* Firm seeking to recapitalise with Fosun and banks
* Oldest travel company has 600,000 customers on holidays
(Adds background, share price)
By Alistair Smout
LONDON, Sept 20 (Reuters) - Britain's Thomas Cook
scrambled on Friday to find an extra 200 million pounds ($251
million) to satisfy its lenders and secure the survival of the
world's oldest holiday company.
Last month Thomas Cook, the pioneer of the package tour,
agreed key terms of a 900 million pound recapitalisation plan
with Chinese shareholder Fosun and its banks.
Thomas Cook, which employs 21,000 people across 16
countries, warned on Friday that this could mean shareholders
losing all of their investment.
Shares in Thomas Cook hit a record low of 3.4 pence
following its statement, and were down 16.1% at 0733 GMT.
"The recapitalisation is expected to result in existing
shareholders' interests being significantly diluted, with
significant risk of no recovery," Thomas Cook said.
Lenders are demanding another 200 million pounds in
underwritten funds to support Thomas Cook in its winter trading
period, when its cash is usually at a low ebb.
"Discussions to agree final terms on the recapitalisation
and reorganisation of the company are continuing between the
company and a range of stakeholders," Thomas Cook said.
"These discussions include a recent request for a seasonal
standby facility of 200 million pounds, on top of the previously
announced 900 million pounds injection of new capital."
Thomas Cook, which has around 600,000 customers on holiday
in Europe, has struggled with competition in popular
destinations, high debt levels and an unusually hot summer in
2018 which reduced last-minute bookings.
A source close to the discussions said on Thursday that
Royal Bank of Scotland (RBS) had hit Thomas Cook with a
last minute demand for the extra funding, adding that the
situation "was becoming more critical".
A spokesman for RBS said the bank did not "recognise this
characterisation of events" and was working with all parties to
"try and find a resolution to the funding and liquidity
shortfall at Thomas Cook".
Under the original terms of the plan, Fosun - whose Chinese
parent owns all-inclusive holiday firm Club Med - would
contribute 450 million pounds ($552 million) of new money in
return for at least 75% of the tour operator business and 25% of
the group's airline.
Thomas Cook's lending banks and bondholders were to stump up
a further 450 million pounds and convert their existing debt to
equity, giving them in total about 75% of the airline and up to
25% in the tour operator business, the group said.
Thomas Cook said on Friday it would provide further updates
"in due course".
($1 = 0.7953 pounds)
(Reporting by Alistair Smout; editing by Kate Holton and
Alexander Smith)
