Thomas Cook Group PLC Update on Proposed Recapitalisation Plan (3318K)
August 28 2019 - 1:00AM
UK Regulatory
TIDMTCG
RNS Number : 3318K
Thomas Cook Group PLC
28 August 2019
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
Update on Proposed Recapitalisation Plan
28 August 2019: Thomas Cook Group plc ("the Company" or "the
Group") is pleased to announce substantial agreement regarding key
commercial terms between the Company, Fosun Tourism Group and its
affiliates ("Fosun"), the Company's core lending banks and a
majority of the Company's 2022 and 2023 senior noteholders.
Implementation of the proposed recapitalisation will involve a
significant new capital investment and reorganisation of the
Group.
Key commercial terms and next steps include:
-- Fosun contributing GBP450 million of new money to the Group
and acquiring at least 75% of the equity of the Group Tour Operator
(subject to the receipt of anti-trust approvals) and 25% of the
Group Airline;
-- The Group's core lending banks and noteholders targeting in
aggregate GBP450 million of new money to the Group and converting
their existing debt into approximately 75% of the equity of the
Group Airline and up to 25% of new equity in the Group Tour
Operator;
-- Implementation commitment targeted for early October 2019.
The execution of the transaction remains subject to a
legally-binding agreement being reached amongst the parties to the
recapitalisation plan and, where appropriate, the Group's other key
stakeholders. The proposed recapitalisation plan does not impact
trade creditors or customers.
In its announcement of 12 July 2019, Thomas Cook stated that
shareholders may be given the opportunity to participate in the
recapitalisation by way of investment alongside Fosun and
converting senior creditors on terms to be agreed. The Board
continues to proceed on the basis that a recapitalisation, achieved
with the support of shareholders, is the preferred means of
securing the future of the Group for all its stakeholders
(including customers, suppliers and employees), while at the same
time enabling the existing shareholders to continue to retain an
investment in the Company. However, the recapitalisation is
expected to result in existing shareholders' interests in the
recapitalised and reorganised Group Airline being significantly
diluted, subject to feedback from creditors, the new money
providers and other stakeholders.
In order to obtain the necessary creditor consents to the
proposed transaction, the Group will today launch three
inter-conditional creditor schemes of arrangement of Group borrower
companies to seek creditor consent to amend certain terms of the
2022 and 2023 senior notes indentures (the "Notes") and the 2017
revolving credit facility (the "RCF Agreement").
The key objectives of the amendments being sought pursuant to
the schemes are to amend the consent thresholds to amend material
provisions in the RCF Agreement and the Notes, including in respect
of releases of relevant principal debt and/or subsidiary
guarantees, and to make certain other technical amendments to
facilitate implementation of the proposed transaction.
The proposed recapitalisation remains subject to certain
matters, including credit approvals, investment approvals,
agreement on Group performance conditions, due diligence, agreement
as to risk allocation amongst Fosun and Group creditors with
respect to the bridge financing during transaction implementation,
agreement between Fosun and the Group's core lending banks and
noteholders on the separation of the Group into Airline and Tour
Operator and timely execution of the separation, reaching agreement
with a range of the Company's stakeholders (including fuel and
foreign exchange hedging counterparties, the pension fund trustees,
noteholders, other financial creditors and approval of Fosun's
shareholders), licence renewals and receipt of regulatory and
anti-trust clearances and approvals.
The current intention of the Board is to maintain the Company's
listing. However, the implementation of the proposed
recapitalisation may, in certain circumstances, result in the
cancellation of the Company's listing.
Reflecting the extensive progress made on agreeing key
commercial terms with the Group's core lending banks and
noteholders regarding the injection of GBP450 million of new money
into the business in connection with the proposed recapitalisation,
the mandate letter and term sheet for a GBP300 million secured bank
financing facility announced in May 2019 will be allowed to
lapse.
Given the substantial agreement regarding the commercial terms
of the proposed recapitalisation, the Company has also agreed a
cost cover arrangement with Fosun, a related party, with respect to
the costs and expenses incurred by Fosun with any professional
advisors in evaluating and negotiating the proposed
recapitalisation. The maximum costs to be covered by the Company
under this arrangement shall not exceed an amount equal to GBP5.43
million (less any amounts paid by the Company to Fosun during the
past 12 months). The cost cover is payable on a weekly basis
beginning 12 July 2019 and ending on 30 September 2019 (with the
period accrued to date being paid retrospectively), unless
terminated sooner in accordance with its terms, and is subject to
certain milestones being reached in connection with the proposed
transaction. This arrangement falls within Listing Rule 11.1.10R
and this announcement is made in accordance with Listing Rule
11.1.10R(c). Arrangements have also been made to meet the
reasonable adviser costs of its core lending banks, bondholders,
and other appropriate stakeholders in connection with the proposed
recapitalisation.
-ENDS-
About Thomas Cook Group Plc.
Thomas Cook Group plc. is one of the world's leading leisure
travel groups, with sales of GBP9.6 billion in the year ended 30
September 2018. It is supported by 21,000 employees and has 200
own-brand hotels. It operates from 16 source markets and serves
over 22 million customers annually. Thomas Cook Group plc's shares
are listed on the London Stock Exchange (TCG).
Contact Details:
Matthew Magee, Thomas Cook
Group
Chris Alfred, Thomas Cook +44 (0) 207 2937059
Media: Group +44 (0) 207 2937203
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END
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