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Thomas Cook share price: what’s the latest after £750 million Fosun rescue deal?

The troubled tour operator announced that it had entered talks with China-based Fosun International regarding a rescue deal earlier this month, but disgruntled shareholders may block it.

Earlier this month, Thomas Cook announced that it had entered talks with China-based Fosun International, other lenders and banks regarding a £750 million rescue deal that could save the troubled tour operator.

However, the deal could be derailed by bondholders upset about the prospect of their shares being further devalued.

Thomas Cook teeters on the brink of collapse

Thomas Cook’s shareholders may be reluctant to accept the rescue deal from Fosun International, but a better alternative is unlikely to materialise.

In May, Citigroup analysts downgraded their target price for Thomas Cook’s stock from 28p to zero pence, declaring that the tour operator was ‘worthless’ in a note to investors.

The £750 million rescue deal values the company’s shares at around 3p per share. As it stands, Thomas Cook’s share price sits at 4.76p a share as of 14:55 GMT on Wednesday.

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Fosun to take control of Thomas Cook if deal approved

Fosun International already controls a 18% shareholding in Thomas Cook, with the Chinese conglomerate securing a majority stake in the tour operator and a minority stake in its airline operations if the rescue deal is approved.

The deal has already been welcomed by Thomas Cook pilots who contend that the recapitalisation will help boost confidence among consumers, staff, creditors and regulators.

‘Hopefully this announcement signals the beginning of the end to the uncertainty that has been hanging over Thomas Cook,’ BALPA General secretary Brian Strutton said in a statement.

‘I strongly support the company's moves to find new investment in order to ensure a strong and successful future for the tour operator and the Thomas Cook airline.’

‘On behalf of the 600 pilots employed by Thomas Cook we hope this deal comes to pass,’ he added.

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