Troubled Thomas Cook in ‘advanced talks’ to sell its tour operator business as part of £750m rescue plan
CASH-STRAPPED travel firm Thomas Cook says it is in "advanced discussions" with Chinese firm Fosun, paving the way for a sale of its tour operator business.
The Thomas Cook Group says the proposal would see Fosun, which is the company's largest shareholder, owning a significant controlling stake in the tour operator side of the business.
It would also have a significant minority interest in the group's airline business.
The news follows recent reports Fosun was eyeing up a deal that could lead to the complete break-up of the British travel firm, which is the world's oldest package holiday company.
Under the proposal, Thomas Cook is looking for a £750million cash injection from Fosun and its lending banks.
A spokesman for Fosun said: "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.
Is my Thomas Cook holiday safe?
THOMAS Cook is stressing that holidays will still go ahead and that they can be booked as usual.
But if the firm does sell part of its business - such as its airline arm - or all of its business then you are protected.
That's because all Thomas Cook holidays are ATOL protected.
It's a legal requirement that every UK travel company which sells package holidays holds an Air Travel Organisers' Licence - or ATOL.
ATOL protection means that customers won't be stranded abroad if the company goes bust and they will be refunded for trips that can't go ahead.
But if part of the Thomas Cook business is sold, then you may notice some changes to your holiday, such as the dates, hotel or flight times.
Martyn James from complaints firm Resolver says that if you're not happy with the changes then "you should be able to cancel without penalty".
Holidays booked with a credit card may also be able to get a refund for cancellations from their card providers under Section 75 of the Consumer Credit Act.
This is because card providers are jointly liable when a purchase or service isn't fulfilled but it only kicks in if you paid at least £100 on credit card.
If you paid less than £100 on credit card or if you paid for your flights on debit card, you may be able to get a refund via a scheme called Chargeback but there's no guarantee.
"We are committed investors, with a proven track record of turning around iconic brands including ClubMed and Wolverhampton Wanderers FC."
Peter Fankhauser, chief executive of Thomas Cook, said: "After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks.
"While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees."
Mr Fankhauser also repeated previous statements that passengers' flights and holidays will continue to operate as normal.
He said: "Holidays and flights will not be impacted and will continue to operate as normal. All of our holidays are still ATOL-protected, and customers can book their holidays and flights with confidence."
See the box above for more on what the ATOL protection means for your trip.
Thomas Cook has been grappling with a decline in bookings and uncertainty surrounding Brexit, which it said contributed to the £1.5billion half-year loss it posted in May.
Thomas Cook is slashing costs in the second half of its financial year in the face of tough trading and higher fuel expenses, including axing 150 roles from its head office in Peterborough.
More on Thomas Cook
In May, it also signalled possible further store closures, having already announced plans in March to shut 21 stores and axe 320 retail roles.
Shares in Thomas Cook have plunged by more than 80 per cent over the past 12 months. The share price stood at 13.28p yesterday, down from £1.04 this time last year.
The travel company has been forced to reassure panicked holidaymakers amid fears the travel firm could go bust.
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