Thomas Cook'’s New Turkish Investor Wants Role in Turnaround Plan
Thomas Cook Group Plc investor Neset Kockar is demanding a role in rescuing the troubled U.K. travel giant after the Turkish tourism entrepreneur’s purchase of a stake last week led the stock to triple in value.
Cook could be a success with the right strategy and management approach, Kockar told Bloomberg News, adding that a planned 750 million-pound ($911 million) financing package from Chinese shareholder Fosun and banks probably over-estimates the scale of challenges facing the world’s oldest holiday firm.
“Fosun may be assessing the company through the lens of a financial investor,” said Kockar, whose Anex Tour has $2.4 billion in annual sales. “I think the problems can be overcome by injecting less cash than the announced recap plan. I see managerial problems rather than simply financial issues.”
Kockar, 46, said he’s devising a long-term business plan for Thomas Cook and has been in touch with investment banks working with it and Fosun. He hasn’t been in direct contact with executives at the U.K. company, which he described as his “inspiration.”
The comments indicate a potential clash over how to revive Thomas Cook as the 178-year-old firm grapples with a long-term decline in the popularity of package holidays in Europe that has stoked debt and shrunk margins. The London-based company’s market value fell as low as 69 million pounds last month, allowing Kockar to buy an 8% holding for about 10 million pounds.
“My aim is not to make profit by trading Thomas Cook shares,” he said in a phone interview in the resort city of Antalya, where Anex is based. “Everyone sees it as a broken machine, but I believe that if the right steps are taken it’s a great machine which will work very efficiently again.”
Fosun, which has an 18% stake in Cook, sent the stock tumbling on July 12 with the announcement of a rescue that would heavily dilute shareholder ownership. Kockar said he took that as evidence that a financial bailout alone won’t save the company and that it requires fresh strategic thinking. The shares jumped Wednesday after reporting Lilia Rodionova, based in Ulianovsk, Russia, owns 3.46% of voting rights. No further information was immediately available. The stock was trading down 3.8% at 9.50 pence at 3:11 p.m. in London.
“When I invested, the reaction of the share price also proved that there were like-minded investors who have made the same diagnosis,” Kockar said, adding that “many interested parties” have approached him about his plans. Thomas Cook declined to comment on the remarks and Fosun didn’t immediately respond to requests for comment outside office hours.
Even with the rally after Kockar’s investment, Cook has lost 94% of its value since its most recent peak in May 2018, when it had a market capitalization of 2.2 billion pounds.
Cook has already arranged a 300 million-pound emergency loan that Fosun has committed to refinance. Under the proposal, whose details are being agreed with banks and bondholders, Fosun will take control of the tour operator arm, while creditors will swap most of their holdings for the majority of an airline unit that Chief Executive Officer Peter Fankhauser has been struggling to sell. The recapitalization will mean a significant dilution of Kockar’s own holding.
Cook should remain a single entity, said the former tourism student, who went from working in hotels to acting as a Turkish go-between for Russian tour operators and then opened his own office in Moscow. That would mean retaining airline operations including Germany’s Condor, according to Kockar, whose own German carrier failed in 2018 amid a European price war.
He also dangled the prospect of cooperation between the U.K. company and Anex Tour, which specializes in supplying holidays in Turkey to tourists from Russia, Eastern Europe and Germany to create a more cost-effective business.
Plans for Anex envisage tapping markets further west, and the company is expanding into hotels and cruising, much like TUI AG, Cook’s biggest rival, has done on a larger scale. The company is buying a ship from Saga Plc, has four hotels in Egypt, and is investing in properties in Vietnam and the Dominican Republic, Kockar said, with growth in Turkey remaining steady.
“I can contribute capital, mutual synergies and operational know how,” the entrepreneur said. “I have my own sources of finance and action plans, and I would like to discuss these. I have a very friendly and constructive approach.”
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