Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Fosun is the biggest shareholder and they can't own a European airline. That by itself is an indication they are interested in the tour operator. The main reason they had to step up a bit is that TC is getting unsolicited offers for tour operator parts and Fosun has to make sure they aren't losing out. But essentially the whole airline sale is TC offering Fosun the option to get their hands on the tour operator.
So for Fosun it remains crucial airlines get sold in order to get the Tour Operator. Unless of course TC flips it around and sells the Tour Operator to Fosun and keeps the airline. It would be a strange and unexpected "solution" but I don't see any real reason why that can't be done.
Anyone thinking Brexit is involved: after Brexit it is still mainly a European airline so the rules would not change at all and Fosun can not have an interest in owning it so it must be sold for their offer to be possible.
jj, what makes you believe they are supposed to go back into the pool as the result of the Air Berlin break up? When Air Berlin was broken up EasyJet bought a part including slots and so did Lufthansa. The discussion was mainly related to anti-competitive behaviour. Lufthansa offered to give up some of the slots as part of their bid in order to avoid further EU investigation into their dominant position. At no point during the Air Berlin break up did anyone suggest slots were to go into the pool as a rule.
To quote from M.8633 (EC case on Lufthansa merger with LGW, the Air Berlin sub they bought):
(37) Under the Slot Regulation, the general principle regarding slot allocation is that an air carrier having operated its particular slots for at least 80 % during the summer or winter scheduling period is entitled to the same slots in the equivalent scheduling period of the following year (the "grandfather rights"). Consequently, slots which are not sufficiently used by air carriers are reallocated (the "use it or lose it" rule).
Note that Air Berlin ceased their flights and hence at some point you can start to question the results of the grandfather rule as the 80% usage may not be there for all recent seasons. But that's a debate that has no relevance for Thomas Cook as they will not cease their usage.
So rules are not a blocker but potentially Lufthansa will do a gesture again. Though as noted in the EC case giving up slots isn't necessarily solving a lot cause Lufthansa would be among the first to receive slots from the pool anyway. Also as all airlines point out that further consolidation will happen there's little option except for being more lenient when it comes to certain dominant positions as it will become more common rather than less common.
So not really sure which articles you read but they were misleading and no idea who you talked to in airline management but their knowledge on slot rules seemed to be fairly limited.
jj, why would it be questionable they can be grandfathered? While debate on the topic has been ongoing continuously for over a decade there's to my knowledge nothing special in Germany at the moment that would affect it.
jj, how has it declined substantially? Buying an airline like Thomas Cook's would benefit them greatly due to the type of business it would get them if they agree on a deal for the future. Lufthansa comes nowhere near the Seat Load Factor TCA has. More filled planes and less seats that need to be sold of at bargain prices as packaged seats are not part of the same market.
If for whatever reason Fosun would be in a hurry (which I doubt they would be for now) they can sell them Tour Ops and keep the Airline in TCG. You would then own shares only in TC Airlines. Chances that they sell the airlines to Fosun is pretty much 0. The EU would not like it. Best thing to do is to get rid of airlines before Brexit anyway.
The thing is that Triton was described as "a highly preliminary and unsolicited indicative offer" and Fosun as "Thomas Cook confirms that it is in discussions with Fosun following receipt of a preliminary approach."
The first was not something they expected while the latter they did. As to whether Fosun will buy it all I guess they will know TC well enough to essentially block the full sale of the Nordics business. As a full sale would include a few things they should try and get their hands on (Airshoppen and the Nordics managed hotel brands). If Triton is ok with buying a slightly stripped Nordics business Fosun might well not care and be willing to give up the Ving brand name (they would still be able to have a Nordics business and keep the other non-local brand names). Then again as you would expect Fosun to be looking at merging their interests (TC and Club Med) it all depends on what kind of market they see in Nordics. If they think they can use the fact that TC is market leader there to expand their Club Med sales then they might not be willing to give up anything in Nordics.
Essentially, splitting Tour Ops would generally be a mess. TC quite likely is better off selling all of it to Fosun and just use the Triton offer to avoid it has to sell too cheap.
I don't expect any RNS on offers any time soon. Fosun quite likely wants the entire Tour Operator and Triton offered to buy Nordics so TC has to at least play it out a bit there. Airlines have to be sold off separately for it to work out neatly. So for it to be a proper round up of all what is going to happen I don't think it's going to be before July. Of course if it is so amazing that they feel like they have to announce it now they can always do so but that would be quite funky for the short squeeze. But don't expect discussions with Fosun to be near a formal offer. At a minimum they had to open discussions in order to make clear they don't want Triton to run off with some of the hotel brands.
At the moment reported shorts still stand at 8.67% with little movement and daily trade volume is fairly low. So for those holding the shorts to get back the shares at low prices we need to see a day with really low prices and massive sales or they need to give up and get out. As such I'd say: if this goes below 10p again -> buy. It will mainly be there because it really is in the interest of some institutions to get shares cheaply and they will do what it takes to get the sp there (might as well swoop up some if they manage to get it there). 10p to 30p hold, 30p+ sell depending on what your profit and commitment is at (Way to early to say how much beyond 30p you can expect so fair enough if you want to get out if it flattens beyond that). Personally I don't expect any big news before July so shorters should not get anxious just yet but still a short squeeze is not out of the question. Personally I expect to see 30p+ eventually but not in the next few weeks. All my humble personal opinion of course, everyone should do their own research.
The Fosun/TC joint venture is already building multiple Thomas Cook branded hotels in China and plans to have 15 hotels in China within the next 5 years. Just like any other business the thing will be that China moves more and more towards how the West experience things and will want to have their own version locally. You can either copy or just buy it outright. Geely could build cars without owning Volvo but it's a well known name across the globe and affordable enough. Thomas Cook is exactly the same. Club Med used to be an example of how to kill a brand and they were still worth billions to Fosun. TC is just as much worth it for Fosun and TC sort of laid out the red carpet by starting a joint venture already. I can't see why Fosun would drop out now, unlike many others they have all the cash they need to buy TC without a worry.
Jj, you could think that for example if you side with the travelweekly analysis that jet2holidays or easyjet holidays should buy them but:
- Easyjet Holidays is nowhere yet and would quite likely cull their own effort
- Jet2 would mainly mean a major impact for UK but less so the other markets
If you go the Fosun route that isn't a competitor. So what you say is essentially true in 2 cases:
- TUI buys them (that would be a shocker)
- They split them by market and sell them (would still leave with no viable big buyers in some markets)
Given the chances of the airlines being bought by another airline is an extremely likely outcome I don't really get why they would still see less redundancies there as for some reason you think there's no economies of scale in airlines?
Jj, your need to reread your posts as you do not spot blatant typos in your numbers. TC has 21k employees of which 13.5 are in tour ops and 7.5 are in airline. Even if someone would chop all of the high street stores (fairly unlikely given online sales will not magically replace it) you'd still be far away from culling a majority of employees of tour ops.
The UK (which is the only market where Thomas Cook is the main brand) is 1/4 of the business. In other areas their main brands are different and people don't care or even know it is a Thomas Cook brand. So it is generally business as usual and people will not be reluctant to book.
jj, we are far from in agreement. You do not understand that money you owe is part of your net debt. When a supplier is paid your net debt position does not change. I have x money and owe x and now I pay x money. My net debt is what I owe minus what I have. As I now owe x less and have x less my net debt has not changed. You somehow think debt towards suppliers is nowhere in the books.
"People will complain that I am using the worst Net Debt figure, but the other debt figures are flattered by using customer deposits. (Customer deposits is just another form of borrowings, just not paying interest on it)."
So customers give them money and they don't owe any money to someone else in return? Interesting concept you have there. Especially given you think they have the most deposits and owe the least money after everyone has gone on holiday (in September). So even though everyone has been on a holiday you think that TC is holding their deposits still and has no debt towards any suppliers of said holidays?
Of course he is happy. This is how it works: you own 100000 shares at say 36p on average and the price dips to 9p. You buy another 100000 at 9p. Your average is now 22.5p. The shares then rise to let's say 18p. Loss when they were at 9p = 100000*27 or 27k £. Loss at 18p is 200000*4.5 or 9k £ and with many reasons to believe sp has not maxed yet. Anyone who sold at a loss at anything below the current sp made a mistake. Anyone who was holding and bought more at 9p did themselves a favour. Of course there's risk and in hindsight it is always easy to justify or denounce what somebody did but he didn't make a mistake. Personally I did the same, I doubled my stake when it hit 9p and I'm pretty happy with it.
Guess we now all know how much of a troll Johnny is. He either can't read basic numbers and is intellectually challenged or he's purposely misrepresenting something that no one is going to get wrong.
That podcast is pretty solid and even though this was before the latest crash it is a solid analysis rather than FUD. He's right abouf Fosun and even gets why HG was a bad idea (she's a brilliant and inspiring person but definitely not a long term fit for TC).
Most speculation here is based on what happens in the UK yet that is 1/4 of their business. The other 3/4 (which often doesn't even trade under the Thomas Cook banner) is elsewhere and in several of those markets share price of Thomas Cook does not get reported on at all in the news. Seems like people here are vastly overestimating the effect press in UK has over the entire picture.
The financing facility of 300M which kicks in on 1/10/2019 does NOT require the airline to be sold. It actually only states "Its availability is principally dependent on progress in executing the strategic review of the Group Airline." which in no way enforces a sale. On the contrary, that 300M is a requirement for having the ability to postpone the sale if necessary. If they were to sell the airline way before 1/10 they would simply not use the 300M as it would not be necessary.
Berenberg has lately been consistently very pessimistic but maybe we should evaluate their knowledge based on their historic TCG advice:
June 5 2014 - Buy -> Wrong -> Should have been Sell
July 29 2014 - Buy -> Debatable -> Very little prospect for higher value so should have been Sell
September 21 2014 - Buy -> Debatable -> Very little prospect for higher value so should have been Sell
November 28 2014 - Hold -> Debatable -> Very little prospect for higher value so should have been Sell
April 17 2015 - Hold -> Wrong -> should have been Sell
November 30 2017 - Sell -> OK
May 17 2018 - Sell -> OK
September 30 2018 - Hold -> Wrong -> should have been Sell
November 30 2018 - Sell -> Debatable -> You can't say anything conclusive for now
February 11 2019 - Sell -> Debatable -> You can't say anything conclusive for now
March 1 2019 - Sell -> Debatable -> You can't say anything conclusive for now
May 6 2019 - Sell -> Debatable -> You can't say anything conclusive for now
Not exactly a track record of excellent advice.