Thomas Cook collapse: As many as 150,000 Britishers holidaymakers have been stranded abroad after popular tour operator Thomas Cook filed for bankruptcy, reports said on Monday. The travel company was in dire need of £200 million in extra funds to secure its future and had approached the UK government to plug a gap in its funding. Thomas Cook’s last-minute attempt to seal a rescue led by China’s biggest shareholder Fosun also failed. Reports said the creditor banks issued a last-minute demand that the travel company find an extra £200 million. On the other hand, trade unions demanded the UK government to interfere in the matter directly or by putting pressure on lenders that include state-owned Royal Bank of Scotland.
Currently, there are 600,000 Thomas Cook customers on holiday, of which 150,000 to 160,000 are British, the bbc.com said. The UK government will have to shell out about £600 million to bring home its citizens stranded abroad. Currently, the UK’s Department for Transport and the Civil Aviation Authority (CAA) have made preparations to bring stranded passengers back to the UK, under Operation Matterhorn. But blogger Simon Jack said the UK government didn’t think it appropriate to spend £200 million on a cash injection to save the company against a whooping £600 million bill to repatriate its holidaymakers. Thomas Cook destinations range from mainland Europe to the Caribbean, the US and the Middle East.
As many as 20,000 employees of cash-strapped Thomas Cook stare at jobs at joblessness, including about 9,000 in the UK. Thomas Cook, which was founded in 1841, served 19 million customers a year in 16 different countries. Now the 178-year-old British tour operator has annual sales of £9 billion and it employs 22,000 staff. Reports said 9,000 of 22,000 workforces belong to the UK.
Thomas Cook, that witnessed financial difficulties in 2018, had produced a business plan saying that it needed £900 million in refinancing. The demanded amount was up from a previous estimate of £150 million. Fosun, the group of creditors and some other investors, who would have funded £900 million in refinancing, commissioned an independent investigation. Financial advisers said Thomas Cook would require an additional £200m on top of the £900m already required, which would bring the total refinancing needed up to £1.1bn, the bbc.com reported.