Member Info for kularatnam

Correct. But what also matters is the way journalists use the language in conveying the news. The heading "Lufthansa deals blow to Thomas Cook over Condor acquisition". It looks as if Lufthansa walked away from bidding. It can also mean Thomas Cook has rejected the offer When they made the offer CEO was all over the place hinting not only Condor but all of the airlines. They should have known at that time what they are bidding for. Now they have chosen the CFO to say the opposite. To me it looks like TCG have some good offers. GLA

DMcG54: I noted your concerns and also your positive outlook on the company like few others including me Honestly I do not know how this stupid Debt for Equity (romantically called D4E) works. But common sense dictates that any drastic action such as this by a lender or lenders could take place only in case of persistent defaults by the borrower. In the case of TCG no such defaults have been reported . Also they have got a cushion of £300 mn of bank facility from October 2019 which is also not conditional and the period till September is the peak period of cash inflows. In my view there is no immediate or long term threat of of D4E. In the meantime the BOD would have finalized the review/sales of some parts of the business - Airlines or Tour Operator. and find a permanent solution to this ballooning Debt issue. I believe the value they will realise will be in excess to the market expectations and would be sufficient to clear the debts. I am making these comments after listening to the Webcast of the Investor presentation of the Q2 results.

oneandonly: thanks and you are absolutely right. Tcg should invest more in ecommerce. I think they are moving towards it, though they are bit late. But their partnership with Expedia might help

Dropped off the top 100 list
Thanks for the info. But I dont see the date of the ranking & also when if at all TCG was inside the Top 100 list? A clarification would be useful.

The following comments are very relevant to TCG:
"The chairman of Merlin Entertainments blamed the markets and “uninformed sell-side analyst notes” for undervaluing the world’s second-biggest theme parks operator, after it accepted a £4.8bn bid from a consortium led by the Danish billionaire owners of Lego.

Sir John Sunderland, 73, chairman of the leisure group behind Alton Towers and the London Eye since 2009, said: “Any news flow, either from the company or because of factors like the terrorism incidents in London — or indeed some fairly uninformed sell-side analyst notes — can all have quite a volatile effect on the share price, which is disproportionate for the underlying value of our company.

“That’s been our frustration, both for the long-term shareholders and for the management of the business.”

Sunderland’s complaint came as Merlin recommended a 455p-a-share offer from a group led by its biggest shareholder, Lego owner Kirkbi, and including private equity giant Blackstone and the Canada Pension Plan Investment Board. Kirkbi and Blackstone jointly controlled Merlin for eight years before it listed in London in 2013."

True. The way TCG investing and developing new initiatives certainly not looks like a company in financial distress. To me it is as if they are going ahead with a clearly defined strategy. Compare this with 2012/13 period - fire sales. They sold hotels in Spain, Paris sold Thomas Cook India USA Saudi and so many.Now of course it looks like a very strategical move and which one/two businesses will remain - Tour Operations or Airlines or Hotels & Resorts.We will know for sure within next few weeks - Q3 first or sale of assets.
Please see this initiative as well
https://www.traveldailynews.com/post/thomas-cook-launches-peakworks-new-travel-agency-distribution-system-to-travel-agencies-across-europe

https://egyptindependent.com/thomas-cook-set-to-launch-new-hotels-in-egypt

“Egypt is proving really popular among our Thomas Cook Group customers, with bookings up 15% for Summer 2019 and 57% for Winter 2019/20 compared to last year,” Will Waggot, Chief of Tour Operating stated ensuring that the two hotels will be great additions that will doubtlessly support Thomas Cook’s presence in Egypt.

Expedia partnership:
If you see the web page of Thomas Cook for the City Break & Hotels options , at the bottom of the page you find the following paragraph which highlights the type of partnership. For other options you don't find this. In a way TCG has also moved towards the tech trends of its peers ATB

"City breaks are featured on website pages operated by Expedia Inc. and the booking of these travel services are facilitated by Travelscape. Thomas Cook is acting as an intermediary. Expedia Inc is not a member of ABTA"

"Hotels are featured on website pages operated by Expedia Inc. and the booking of these services are facilitated by Travelscape and other Expedia Group companies. Thomas Cook is acting as an intermediary. Expedia is not a member of ABTA."

I am happy to see some positive comments coming out and it bodes well.for the sp. Thanks to all who commented Why I thought Fosun doesnt want airline sale is because the Tour Operator business needs an Airline arm. Since they cant own fully an airline they still can have a major minority stake upto the limits permissible and can have a say. Now they have 18% .Certainly multiple bids add value and Board would be in dilemma. In these circumstances valuations should be in higher end of EBITDA or EBIT multiples.and not on fire sales basis as some try to make it.

IMO it is all about Fosun Fosun & Fosun.Firstly Fosun cant change its stake in TCG because they are in talks to buy parts of the business. Secondly why did they not wait till the airlines are sold to express their interest in the Tour operator business? May be 1) due to fear that Airlines could fetch reasonably good price that could increase the valuation of the remainder entity 2) they dont want airlines to be sold.3) other reasons which I cant think of.
I tend to go with my (2) view. Any views from this forum ??? ATB

UK will record a wettest June in years. See the following articles how it affects Brtions travelling out.
https://www.itv.com/news/2019-06-19/wet-weather-could-make-june-most-rainy-in-years/
https://www.theguardian.com/weather/2012/jul/10/britons-holiday-abroad-summer

Looking good for TCG. GLA

It is no secret Fosun wanted to buy TCG all along but the restriction in airlines ownership prevented it from doing so.Recently the expectations were that they will acquire the Group after the Airlines are sold to various third parties. But intriguingly they have now approached TCG to buy the Tour Operator business before the airlines sales are concluded. If both the Airlines and Tour operator businesses are sold TCG will become more or less a shell company..From Fosun's point of view having a Tour Operator business without an easily accessible Airlines will not be a convenient arrangement. IMO Fosun would prefer Airlines, at least the major ones, to stay within the TCG group, also because in a fire sales situation valuation may not be with premium.After all the review of the Airlines came about in order to get over the financial difficulties. If Fosun can provide that with the purchase of Tour Operator why sell the Airlines? TCG will eventually be a Airlines and Online Tour Operator business and that too would be substantially, within the permitted limits, owned by Fosun.This is just a point of view and I may be crazy. GLA

which has a 12.5% interest in PB is going private. They bought the shares @ £3++ range and also jointly own a online estate agency. Dont know what will happen.
It is also strange PB does not report much on their German business.

Something to laugh
https://www.thesun.co.uk/sport/football/9060805/arsenal-chelsea-fans-fume-thomas-cook-europa-league-baku/

What puzzled me most when TCG announced the sale to strategic investors, rather than spinning off the Airlines Division with an IPO. The present method gas restrictions in attracting buyers - anti trust/competition and ownership to non Europeans. In an IPO the valuations are based that of peers as well its own earnings etc. As a comparison I examined Easy Jet, IAG, Rynair and Wizz. On revenue they trade 0.7,0.4,1.7 and 1.2 times respectively. On operating profit the figure are 9,3,8 and 8 times. TCG airlines Revenue 3.5 bn & Op Profit 135 mn. Even if you take the lowest denominators of the peers TCG airlines should have a valuation of £1.5bn based on Revenue and about £400mn. The real value could be within this. Not that TCG wouldn't have looked at this option, may be they confident of getting a better value. GLA

Impairment and amortization depn apart, what matters is the cash generation. Did anyone notice the debt reduction as stated in the last update? Half year debt was $ 1,973 mn and end Dec 31st it was $1,771 , a $200mn reduction which is quite high and shows the cash generation and surplus.in the six months period. Would be nice if it can be extrapolated for the full year 2019.

Sorry. It can be opened by subscribers only.

A price tag of £1bn to £3bn.?? Pls read the following article

https://www.ft.com/content/e25c6598-2ae9-11e9-a5ab-ff8ef2b976c7

https://www.thetimes.co.uk/article/thomas-cook-eyes-break-up-with-airline-sale-xzkwhh2n3

So the sale of the Airlines was in the works for almost an year. Officially now only they are disclosing. It means the sale can take place sooner. Actually a rights issue would have been better but should have been done when the share price was in its 140ps.They missed it. May be a reason for the Finance boss shown the door. Now sale of Airlines is the only option, like Harriet Green sold many non core assets during her time.

We should not compare Thomas Cook airlines with those failed recently/are struggling. Its fundamentals are strong with captive business base.L/Y Revenue £3.5 & op profit £127mn. Compare this with Easy Jet/IAG valuations. Mkt value of Easy jet is £5.2bn or 90% of its Turnover and 12 times of its op profit. For IAG it is 60% of its revenue & 6 times of its op profit.These are stock market valuations. If it is outright sale valuations could be higher by as much as 40%. Now do some calculations. You are talking easily above £1.5bn valuation.