Thomas Cook ceases trading after failing to salvage rescue deal

Thomas Cook ceases trading after failing to salvage rescue deal

Travel giant Thomas Cook has collapsed after last-minute efforts to secure a rescue deal failed.

The 178-year-old business ceased trading with 600,000 overseas, including 150,000 from the UK.

The CAA is to begin the biggest-ever repatriation of UK travellers with more than 45 aircraft sourced from around the world.

German authorities face organising even bigger repatriation with up to 300,000 Germans abroad on Cook holidays.

The Thomas Cook board called in administrators after running out of options to keep the business afloat. A senior industry source said: “The board could not keep the wheels spinning. They had a legal duty.”

Thomas Cook’s failure leaves 20,000 staff, including 9,000 in the UK, out of work.

The insolvency was timed to kick in once the group’s entire fleet of aircraft was on the ground in the early hours of Monday.

The holidays of those due to fly out from today have been cancelled leaving hundreds of thousands to apply for refunds.

Chaos and confusion are expected at airports, as people turn up for cancelled services or to enquire about flights home, and at the more than 3,000 hotels used by Thomas Cook – most of which will be owed money by the group.

The group was set to be rescued in a deal worth £900 million which would have seen Fosun taking control of 75% of the company’s tour operating the business and up to 25% of its airline in exchange for a £450 million capital injection.

Debt holders and lending banks would put up the remaining £450 million in exchange for control of Thomas Cook’s airline and up to 25% of the tour operator.

The deal, which had been pushed back once, was due to be voted on by creditors and stakeholders on September 27.

But last week Thomas cook’s lending banks, led by Royal Bank of Scotland and Lloyds demanded it finds an additional £200 million in contingency funding.

This demand for “a seasonal standby facility” followed fresh advice from financial consultants working for the banks which suggested Cook risked running out of cash once more by late 2020.