Fosun poised to take control of Thomas Cook

Fosun poised to take control of Thomas Cook

But Thomas Cook has offered an olive branch to existing shareholders if the agreement is ratified, and said they may be able to "participate in the recapitalisation".

"We are committed investors, with a proven track record of turning around iconic brands including Club Med and Wolverhampton Wanderers FC", Hong Kong-listed Fosun, which already owns an 18 per cent stake in Thomas Cook, said.

"Whilst this has always been seen as the likely route out of the mire for Thomas Cook, there are several questions remaining, for instance, how would this deal impact the proposed airline sale?"

Shares in cash-strapped travel firm Thomas Cook have plunged more than 40% after it confirmed talks with its largest shareholder over a deal which would effectively hand over control of the company.

Thomas Cook Group is in talks with its largest shareholder Fosun Tourism Group and lenders about a 750 million pound ($941 million) recapitalisation plan which would give the Chinese company control of the United Kingdom travel operator's core tour business.

"While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution".

It follows recent reports that Fosun was eyeing up a deal which could lead to the complete break-up of the British travel firm, which is the world's oldest package holiday company.

Fankhauser said the sale of the airline business was paused while Thomas Cook focused on the refinancing, adding it was "too early to speculate on what will happen on the airline review". As a modern worldwide investment company, Fosun may encourage Thomas Cook to enhance booking online, causing even more job cuts and future store closures.

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The group had total debt of about 1.9 billion pounds as of March 31, according to data compiled by Bloomberg, and its shares have tumbled 87 percent over the past 12 months. "Every year we have to sell 3 million holidays before we have our interest burden paid", he told reporters.

Fosun, which owns a fifth of the shares, wants control of Thomas Cook's tour operating business.

A year ago Thomas Cook's share price stood at 104p, and the stock ended their first day of trading after listing on the stock market in June 2007 at 320p.

Its higher-margin airline business - which includes German holiday carrier Condor - made £3.5 billion in revenue.

The recapitalisation proposal would require a reorganisation of the ownership of the tour operator and airline businesses, the company said.

It is one of China's so-called "grey rhino" companies - along with Wanda, HNA and Anbang - that have come under growing scrutiny in the last few years from mainland authorities wanting to crack down on debt-fuelled foreign acquisitions.

The proposal is subject to due diligence and further discussion, among other things, Fosun said.

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