Thomas Cook share price: what happens to shareholders now?
The British tour operator has collapsed, leaving thousands of holidaymakers stranded abroad after the 178-year-old business failed to secure a rescue deal.
Thomas Cook has collapsed after rescue talks with lenders, shareholders and the UK government failed, leaving around 150,000 holidaymakers stranded abroad and 21,000 employees’ jobs at risk.
‘We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future for its employees, customers and suppliers,’ Thomas Cook CEO Peter Fankhauser said.
‘Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable,’ he added.
The news leaves shareholders unable to sell their defunct shares, with the tour operator’s stock now worthless.
Thomas Cook ‘had no choice’ but to enter liquidation
The 178-year-old business said that despite ‘considerable efforts’ rescue talks between various stakeholders failed, leaving its management ‘no choice but to take steps to enter into compulsory liquidation with immediate effect’.
Thomas Cook’s restructuring process will be handled by AlixPartners, which will work with the UK Civil Aviation Authority (CAA) to repatriate British holidaymakers left stranded abroad.
British Prime Minister Boris Johnson told reporters on his way to the UN General Assembly in New York that ‘one way or the other, the state will have to step in to help stranded holidaymakers’.
Government bailout would not have saved Thomas Cook
The government refused to offer Thomas Cook a £250 million bailout, with British transport secretary Grant Shapps blaming the company’s £1.7 billion debt pile for its decision.
‘I think if we'd seen a business that clearly had hot prospects and all it needed was something very simple and then it would carry on, that would be very different,’ Shapps told ITN.
‘I don't think that there was a route through to pumping in taxpayers' money and then actually avoiding today. I think today would have happened even if we'd done that,’ he added.
Tui stock up after Thomas Cook’s demise
Rival tour operator TUI saw its stock rise as much as 10% in early morning trading on Monday after news broke of Thomas Cook’s collapse.
easyJet and Virgin Atlantic are among the airlines being called upon by the CAA to help bring Thomas Cook’s stranded customers home.
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