Friday, 20 September 2019

Thomas Cook on the brink........ seeks government bailout

One of Europe's the longest-running holiday firms, Thomas Cook, is on the brink of administration this weekend as it struggles to find an extra £200 million funding, demanded by the banks.

Royal Bank of Scotland, Lloyd and others are demanding the travel firm stumps up the £200 million for contingency funds for the winter months, in addition to the £900m brought in by Fosun as part of a rescue deal.  RBS defended its stance, saying  "As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook."

It is understood that Thomas Cook has now approached the UK government for some sort of bailout or funding to stave off administration and survive the summer and winter seasons. The Department for Transport said in a statement, "We do not speculate on the financial situation of individual businesses.".

It is estimated that there are 600,000 customers of Thomas Cook overseas on holidays, around 160,000 of those come from the UK, with hundreds of thousands about to embark on trips from various European countries. 

At this time, negotiations and discussions are still ongoing, however, the UK's Civil Aviation Authority has started to draw up contingency plans to repatriate overseas holidaymakers, which would the biggest one of its kind. It is understood that a number of aircraft have been chartered for Sunday and Monday. 

The 178-year-old company employs around 21,000 people around the world including some 9000 in the UK who would lose their jobs if the firm collapses. Hundreds of others would also face an uncertain future working in support industries and suppliers. 

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