Flying Back From a Thomas Cook Holiday? Good Luck
The British travel operator is running out of options as it tries to find 200 million pounds to make potential lenders happy.
Will I ever get out of here?
Photographer: STR/AFPOff for a bit of late summer sunshine? I hope you didn’t book with Thomas Cook Group Plc. The struggling British tour operator is in last-minute discussions with lenders to try to stave off a collapse because of a funding shortfall of 200 million pounds ($250 million).
A company failure would be disastrous for half a million holidaymakers. Bondholders would suffer heavy losses too if Thomas Cook agrees to swap its debt for equity, as has been proposed. Administration might be even worse as debt-owners could get nothing. It’s less of a drama for equity investors. They’ll probably be wiped out either way. The shares fell as much as 28% on Friday to a fresh low of 3.2 pence before recovering slightly.