* 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 detail, background)
By Alistair Smout
LONDON, Sept 20 (Reuters) - Britain's Thomas Cook
needs to find an extra 200 million pounds ($251 million) to
satisfy its lenders or one of the world's oldest holiday company
risks collapse, potentially stranding thousands of holidaymakers
across Europe.
Demand for an extra funding facility puts that deal at risk,
as well as the jobs of Thomas Cook's 21,000 employees and the
holidays of 600,000 customers, mostly from Germany, Britain and
Scandinavia.
Thomas Cook said the recapitalisation posed "a significant
risk of no recovery" for the diluted shareholders. Shares in the
company hit a record low of 3.22 pence following its statement.
The stock was down 15% at 0733 GMT.
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 has struggled with competition in popular
destinations, high debt levels and an unusually hot summer in
2018 which reduced last-minute bookings. The firm has 1.7
billion pounds of debt.
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 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.
GET A GRIP
If that deal is not finalised before a creditor vote on
Sept. 27, then holidaymakers could be facing the second major
collapse of a tour operator in as many years, after the failure
of Monarch in 2017.
When Monarch collapsed, the British government repatriated
all customers abroad, both those with package holiday protection
from Air Travel Organisers' Licensing (ATOL) and flight-only
passengers who were not protected.
If Britain does the same for Thomas Cook's customers, then
the 160,000 Britons abroad that would need repatriation would
eclipse the number brought home after Monarch's collapse.
A spokesman for the Department for Transport declined to say
if there were plans for a similar repatriation effort. Asked
about Thomas Cook, he said: "We do not speculate on the
financial situation of individual businesses."
British pilot union BALPA, whose members have previously
gone on strike in a disagreement over pay with Thomas Cook's
management, have supported the restructuring and urged the banks
and government to support the travel group.
"The government sat on the sidelines wringing its hands when
Monarch Airlines was let down by its financiers, this time
government needs to get a grip and do its bit to save Thomas
Cook," General Secretary Brian Strutton said in a statement.
($1 = 0.7953 pounds)
(Reporting by Alistair Smout;
Editing by Alexander Smith and Edmund Blair)