Travel company Thomas Cook collapses, leaving 600,000 travellers on edge Thomas Cook, the world's oldest travel firm, has collapsed, stranding hundreds of thousands of holiday-makers around the globe and sparking the largest peacetime repatriation effort in British history. The firm runs hotels, resorts, airlines and cruises for 19 million people a year in 16 countries. Thomas Cook ceased its Australian operations earlier this year. More than half a million tourists stranded. It has 600,000 people abroad, forcing governments and insurance companies to co-ordinate a huge rescue operation. Britain's Civil Aviation Authority said on Monday that Thomas Cook had now ceased trading and it would work with the government to bring the more than 150,000 British customers home over the next two weeks. Peter Fankhauser, the chief executive of Thomas Cook, apologised on Monday. "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. "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. "I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years. This marks a deeply sad day for the company." The debt-laden company, which confirmed on Friday it was seeking £200 million ($369 million) in funding to avoid going bust, was in talks with shareholders and creditors over the weekend in a bid to stave off failure. Most of Thomas Cook's British customers are protected by the government-run travel insurance program, which makes sure vacationers can get home if a British-based tour operator goes under while they are abroad. Thomas Cook was is in talks with shareholders and creditors to stave off failure.Credit:Getty Images Thomas Cook's financial difficulties also raised questions about the jobs of the 22,000 people employed by the company around the world, including 9000 in Britain. Thomas Cook, which began in 1841 with a one-day train excursion in England and currently has operations in 16 countries, has been struggling over the past few years. It recently raised £900 million, including from leading Chinese shareholder Fosun. In May, the company reported a debt burden of £1.25 billion and cautioned that political uncertainty related to Britain's departure from the European Union had hurt demand for summer holiday travel. https://www.smh.com.au/business/com...-000-travellers-stranded-20190923-p52txy.html Heatwaves over the past couple of summers in Europe have also led many people to stay at home, while higher fuel and hotel costs have weighed on the travel business. A website set up by the aviation authority to aid the firm's customers crashed shortly after the company collapse was announced. Unions representing Thomas Cook staff had urged the British government to intervene to prop up Thomas Cook to protect jobs and the traveling public.
Thomas Cook shows China's new hard line China's biggest deal-makers have had their wings clipped as Chinese regulators worry about the mountains of debt acquired to fund their international ambitions. Karen MaleyColumnist Sep 24, 2019 — 6.05pm There was a time when Chinese corporate owners could be relied on to stump up cash to support their struggling overseas investments. Monday's spectacular collapse of the 178-year-old British tour operator Thomas Cook demonstrates just how much their attitude has changed. Even though the Chinese conglomerate Fosun was Thomas Cook's largest shareholder, owning about 18 per cent of the company, it baulked at the growing cost of rescuing the troubled business. Back in August, Thomas Cook came up with a £900 million ($1.65 billion) rescue deal, under which Fosun agreed to make a £450 million cash injection in return for a 75 per cent stake in the tour-operating business and a 25 per cent stake in its airline. But earlier this month the company's bankers – who were being asked to swap debt for equity in the business – demanded that Fosun also stump up an additional £200 million as "standby" equity to tide the company through the winter months when business is slow. The Chinese conglomerate Fosun, Thomas Cook's largest shareholder, baulked at the cost of rescuing the company. Getty Images Fosun refused to accede to their demand, which triggered the collapse of the world's oldest travel group. In a statement, Fosun said it was "disappointed", adding that its "position remained unchanged throughout the process, but unfortunately other factors have changed". However, this isn't the only example of Chinese corporates demonstrating that they are prepared to take a tougher stance with foreign creditors. Earlier this month, Haikou Meilan International Airport – which is 28.6 per cent owned by companies related to the Chinese conglomerate HNA Group – failed to make a $US200 million ($295 million) bond repayment due to international investors. This is the eighth Asian dollar bond default so far this year, and international lenders are bracing for more in coming months. New pressure from Beijing The marked change in Chinese corporate behaviour partly reflects the increased pressure being applied by Beijing. HNA and Fosun – along with Anbang Insurance and Dalian Wanda Group – were once China's most aggressive overseas investors, spending tens of billions of dollars to snap up assets around the globe. But in mid-2017 these high-flying private conglomerates came under intense scrutiny from China's banking regulator as Beijing sought to clamp down on soaring corporate debt levels. Chinese authorities were alarmed by the rising risk and leverage these groups were taking on, and their intricate and often opaque ties with the country's banks. In response to this pressure, many of China's biggest and most debt-laden conglomerates began to unwind their acquisition sprees by offloading foreign assets. Since the beginning of the year, Chinese companies have agreed to sell about $US40 billion worth of international assets, up from $US32 billion for the whole of last year, according to data from Dealogic. At the same time, their acquisitions of overseas assets have dwindled to $US35 billion. This means that for the first time in a decade Chinese companies are now net sellers of global assets. And this trend is likely to continue as credit conditions keep tightening for privately owned Chinese corporates, whose ability to access funding was dealt a blow in the wake of Beijing's takeover of the struggling Baoshang Bank earlier this year. Under the terms of the takeover, Beijing only guaranteed Baoshang's negotiable certificates of deposit up to 50 million yuan ($10.4 million), breaking the implied government guarantee on all bank borrowings. But this had the effect of severely reducing the willingness of large banks to lend to smaller ones. As a result, smaller Chinese banks – which have traditionally found it difficult to raise deposits and have instead relied on borrowing from large banks – now face a liquidity crunch. Even though Beijing has changed tack this year and is now urging banks to ramp up lending to bolster flagging economic activity, the bulk of this credit is being channelled to large state-owned firms. It is clearly still possible for Chinese corporates to raise funds to acquire foreign businesses, provided these are either strategic, or closely connected with their core business. Last week the dairy giant China Mengniu Dairy Company lobbed a $1.5 billion takeover bid for Australian organic infant formula company Bellamy's. Mengniu, which is listed on the Hong Kong Stock Exchange, is 16.2 per cent owned by COFCO, a Chinese government-owned food conglomerate. https://www.afr.com/news/world/asia/thomas-cook-shows-china-s-new-hard-line-20190923-p52uab
Who uses travel agents any more...no wonder they went bankrupt. With direct pricing from airline websites, numerous hotel websites and tour companies advertising direct, a travel agent is a dinosaur and TC could never survive. Even for money changing there are so many other options.
Thomas Cook bought a rival which had more debt than they could handle-lack of due diligence by the usual suspects -M&A teams should be shot mostly. A trusted brand that could have been thriving.