Wolves FC's Chinese owners fly to rescue of troubled Thomas Cook travel company
Troubled travel company Thomas Cook has "substantially agreed" the key terms to a £900m rescue deal with Chinese firm Fosun, lenders and bondholders to secure the company's future.
As part of the deal Thomas Cook has agreed to sell the majority of its tour operator business and a stake in its airline business to Chinese conglomerate Fosun.
Fosun announced it will contribute £450m of new money to the UK travel firm and acquire 75% of the company's tour operator business and 25% of its embattled airline business.
Group lenders and bondholders will stump up around £450m as well for approximately 75% of the equity of the airline and up to 25% of new equity for the tour operator arm.
The travel company currently has around 20 branches across Northern Ireland.
The deal with Shanghai-based Fosun will secure its position as an emerging presence in the European market.
The company already owns the holiday resort chain Club Med and the Premier League football club Wolverhampton Wanderers.
Fosun also bought French fashion company Lanvin and took a majority stake in Austrian luxury lingerie brand Wolford.
Thomas Cook confirmed that although shareholders could retain an investment in the company as part of the deal, shareholdings in the reorganised company will be "significantly diluted".
It said that customers and trade creditors will not be affected by the restructuring deal.
The holiday firm said the deal was still subject to a number of conditions, including performance, due diligence and credit approvals.
Despite the move, it said it currently plans to maintain its listing on the London Stock Exchange, although the recapitalisation could result in its listing being cancelled.
The deal comes after Thomas Cook confirmed last month that Fosun, its largest shareholder, was in talks to provide the £450m contribution as part of a £750m cash injection alongside lenders and bondholders in a bid to secure the future of the struggling company.
It said that Fosun would help to recapitalise the company, with the help of the lending banks.
Thomas Cook has suffered recently as a result of mounting debts, reporting a £1.2bn net debt in its half-year results in May.
It has also been hit hard by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.
Shares in Thomas Cook fell 13.8% to 6.1p in early trading yesterday.