Shares in travel company Thomas Cook continue to tumble after the company’s management admitted that its increased capital raising plan would dilute existing shareholders’ stakes.
It has been announced that the company is in talks with creditors over the injection of an extra €161m, on top of the more than €800m already announced.
The firm says it has made “significant progress” in finalising the key terms of a cash injection from its largest shareholder, China’s Fosun, and creditors, which it announced last month. The cash is part of a deal that would see Fosun buy Thomas Cook’s tour business.
Fosun already owns Club Med.
The company said the additional capital, “will provide further liquidity headroom through the coming 2019/20 winter cash low period and ensure the business can continue to invest in its strategy”.
Thomas Cook’s proposed £750m rescue deal is a sign of “desperate times” at the troubled travel company, according to Markets.com analyst Neil Wilson.
A spokesman for Fosun Tourism Group previously was quoted as saying, “Fosun is a shareholder in Thomas Cook, because it is a British company operating in the global travel industry, in which we have extensive experience. We are committed investors, with a proven track record of turning around iconic brands including Club Med and Wolverhampton Wanderers [football club].”