(Bloomberg) -- Shares of Thomas Cook Group Plc tanked after the U.K. tourism operator said it needs more emergency financing.
Thomas Cook said it will require another 200 million pounds ($251 million) for a “seasonal standby facility,” sending the shares down as much as 28%. The company already increased the size of a bailout plan in August by 20% to 900 million pounds.
Thomas Cook is trying to save itself by selling the majority of its tour-operating business to the tourism arm of Chinese shareholder Fosun International Ltd., and its airlines to a group of creditors, a rescue plan that would swell to 1.1 billion pounds. On Sept. 17, it filed for Chapter 15 court protection in the U.S., and with the summer travel season in the northern hemisphere ending, it’s poised for a seasonal swing from generating to burning cash.
The company that invented the package holiday has gone within a year from concern about how a freak north European heatwave in 2018 hurt sales to a full-on fight for survival. The stock was trading down 25% at 3.35 pence as of 9:46 a.m. in London, valuing the travel operater at 52 million pounds, the lowest since the company took its current corporate structure in 2007.
Efforts to raise cash by selling the airline operations thus far didn’t succeed, and while banks and bondholders haven’t turned their backs on the tour operator yet, any restructuring efforts will prove void if customers stop buying vacations and flights from Thomas Cook for fear that the company won’t be around to honor their bookings.
The British Airline Pilots Association called on the government in a statement Friday to intervene and pressure banks to provide additional liquidity.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR