Sunday Times article, 8/9/199 Sep 2019 00:42
Heading: “Thomas Cook flies into pensions row over Chinese rescue deal”. Liam Kelly. Sunday 8 September 2019.
Thomas Cook is at odds with the trustees of its pension scheme — a row that could derail a £900m rescue deal.
The airline and tour operator’s pension trustees have demanded better terms, including a stake in the restructured business, in exchange for backing the deal, Sky News reported.
The trustees also want guarantees about funding, and for its new Chinese owners to continue the £25m annual payment into the pension scheme.
Thomas Cook, led by chief executive Peter Fankhauser, is fighting for survival. Sluggish bookings due to Brexit and its £1.2bn net debt pile have spooked investors.
The 178-year-old travel giant proposed a rescue plan last month that would see its largest shareholder, Fosun, inject £450m in exchange for 75% of its tour operating arm and 25% of its airline. The Chinese investor is barred from controlling the carrier under EU rules.
Thomas Cook’s lenders and bondholders would control the rest, wiping out other shareholders. A board meeting will be held on Wednesday to determine how the deal would be structured, which could result in the cancellation of its stock market listing. The shares are down 84% this year and closed at 5.4p, giving the firm a value last week of just £83.6m. In May, it issued a profit warning and revealed a £1.5bn half-year loss after a £1.1bn write-off relating to its 2007 merger with My Travel.
Thomas Cook employs 21,000 people. More than 11m passengers booked to travel with it this summer.
As well as the support of the trustees, the company needs to convince the Civil Aviation Authority to renew its operator’s licence — which expires at the end of this month — for another year.
Thomas Cook declined to comment.
(End of article).
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