Travel group Thomas Cook struggles to survive before Monday deadline

LONDON (Reuters) – The British government has planned to take stranded vacationers home if Thomas Cook (TCG.L) ceases its activities, an event likely to cause chaotic scenes in seaside resorts and airports around the world.

The bosses of the world's oldest travel agency were still meeting lenders and creditors in London on Sunday to try to reach a last-minute deal to keep the company afloat.

The board of directors of the company will then meet in the early evening to decide the fate of the company. The company will eventually be run in the early hours of Monday.

Thomas Cook, which manages hotels, resorts and airlines, has 600,000 vacation guests, which means governments and insurance companies may be forced to intervene and bring them back. at home if society ceased its activities.

Unions and Labor opposition urged the government to accumulate money, but the Foreign Secretary seemed to reject this idea on Sunday.

"We do not systematically use taxpayer money when businesses collapse, unless the national strategic interest is good," Dominic Raab told the BBC, adding that plans were in place to prevent anyone from getting stuck.

The company, founded in 1841, has fought for its survival after its lenders have threatened to end a bailout deal that has been going on for months.

Wounded by the high level of debt, online competition and geopolitical uncertainty, Thomas Cook must find £ 200 million in addition to a £ 900 million package that he already had accepted, to be able to cross the winter months with less cash and must pay for hotels for summer services.

This has made social media customers fear that some hotels, still unreimbursed by Thomas Cook, might ask vacationers to leave if the company collapses.

Some British tourists were briefly detained at a hotel in Tunisia by staff members who wanted to know if they had been paid. Thomas Cook's clients have since gone and returned home, according to their social media posts. [L5N26D0FR].

At Sunday's meeting, the company was asking its lenders to restructure or reduce their requirements. He has also asked credit card companies to release 50 million pounds which they hold as collateral for the company's bookings.

The main shareholder of the company, Fosun in China (1992.HK), was to play a central role in the restructuring.

A person familiar with the situation told Reuters that it was still possible to reach an agreement. The person refused to be named because of the sensitivity of the situation.

FINAL TIME

If Thomas Cook fails, this would cause the greatest peacetime repatriation effort in British history.

The government and the aviation regulator have developed a plan to intervene and call on other airlines to bring the British home if necessary. The person familiar with the situation estimated the cost of this move at around 600 million pounds.

In addition to British holidaymakers, some 460,000 other customers are also abroad, most from Germany or Scandinavia.

A German official said that according to the rules of this country, it would be the responsibility of insurance companies to help customers return home.

Condor, a German airline owned by Thomas Cook, said in a statement that his parent company was doing everything possible to obtain new funds. "Negotiations with all major stakeholders are complex and ongoing. Condor flights are currently operated regularly. "

The announcement of the potential disappearance of Thomas Cook alarmed not only the resorts and bars at the pool, where customers use social media to get updates, but also among suppliers and future customers in loss of confidence.

This is draining the company of the liquidity it needs to continue operating and intensifying the pressure on one of the oldest and most valued companies in Britain.

According to figures from the British aviation consultancy group IBA, almost all of its 116 aircraft are rented rather than directly owned. Until now, there is no indication that leasing companies are demanding the return of their aircraft, preferring to spend refinancing talks.

"Hello Annie, I know your father might be upset by all the news about Thomas Cook and our company recently, but our airline operations continue to function normally," the company told a worried customer.

British Foreign Minister Raab also sought to reassure holidaymakers that they would not be stranded abroad.

"We … hope that Thomas Cook can continue, but in any case, as you can imagine, we have put in place an emergency plan to ensure that, in the worst case, we can help anyone who might otherwise be blocked, "he said.

At the board meeting, the company will have to decide whether, in the short term, it has the liquidity to pay its debts and whether it has a reasonable prospect of meeting its commitments within six to twelve months, which is based on its guarantee. a deal.

At the previous meeting, lenders will have to decide whether they want to continue supporting a company with 19 million customers a year in 16 countries.

Previously a pioneer in the field of package holidays and mass tourism, he struggled to pay interest on his debt of £ 1.7 billion, while organizing events such as a coup d'etat. 39 State in Turkey, a heat wave in Europe, fluctuating oil prices and aggressive prices of low cost airlines such as Ryanair and easyJet.

($ 1 = 0.8014 pounds)