Thomas Cook's stark warning to shareholders
Thomas Cook has warned shareholders that unless they approve the sale of some of its aircraft and its interest in a Spanish hotel chain, the tour operator may be forced into administration.
It has called a general meeting on 29 May for shareholders to approve the sale and leaseback of 17 of its aircraft and the disposal of five Spanish hotels.
If agreed it will see the sale of its interest in Spanish hotel chain Hoteles Y Clubs De Vacaciones (HCV) complete as quickly as 29 June, the Aircastle aircraft disposals by 30 June and Guggenheim aircraft by 31 July, raising £238.8 million in total for the operator.
But if shareholders do not support the move, it could jeopardise the recent £1.4 billion refinancing package which gives Thomas Cook a further three years to repay its debts.
In the information sent to shareholders, Thomas Cook said that "the Company is of the opinion that, if any one or all of the Disposal Resolutions is not passed, the Retained Group will not have sufficient working capital for its present requirements, that is, for at least the next 12 months following the date of publication of this Circular".
The shareholder circular showed Thomas Cook had losses of £262.7 million in the six months to March 2012 compared to losses of £165.8 in the six months to March 2011.
The tour operator is still looking to sell its stake in air traffic control service, NATS and its part of currency exchange business Thomas Cook India.
On announcing the sale and lease back of 17 aircraft on Friday, CEO Sam Weihagen said that first half seasonal losses had widened but that summer bookings had improved in recent weeks, see previous story.
Average selling price is stable, up 4%, and bookings for independent and specialist businesses are up 11%. Net debt as of March 31 was £1.39 billion.
The company appointed ex-Kwik Fit finance boss Michael Healy as chief financial officer last week and is believed to be close to appointing a new chief executive.
With permission from Travelmole
Hi.....thats a worry...I have hols booked with them for 6wks after that meeting....surely the share holders will see sense and vote for the sale of assets....if they dont ...Im wondering how long after that meeting on the 29th may would they go into administration.... and if that would lead to recievership....and how long before it would affect the customers who have paid thier full balance.....
I was also going to book for sept but was holding back because I wanted a better price....am glad I didnt book now.
I feel its nolonger safe to book a holiday ...where you have to pay balance 14wks before....its only 8wks before we go...and this type of news spoils things even if everything is right in the end....its about time the law was changed or a new one written....so people do not get placed in this position...especialy now even the likes of thomas cook are getting themselves in a mess....tweetie
I was also going to book for sept but was holding back because I wanted a better price....am glad I didnt book now.
I feel its nolonger safe to book a holiday ...where you have to pay balance 14wks before....its only 8wks before we go...and this type of news spoils things even if everything is right in the end....its about time the law was changed or a new one written....so people do not get placed in this position...especialy now even the likes of thomas cook are getting themselves in a mess....tweetie
This is terrible news, why say the have secured their future, then say that! I'm not happy. 
Let's just hope the shareholders have more sense than some of the ex company employees had!!!
I was also going to book for sept but was holding back because I wanted a better price....am glad I didnt book now.
I'm not getting at you personally Tweetie Pie because I think that we've all contributed to this situation but as consumers I think that we need to start recognising that we have played our part in bringing this sorry state to pass. We've got used to paying less and less in real terms for our holidays and flexed our consumer muscles to such an extent that TOs dropped their prices to such low levels that their businesses have become unsustainable. I wouldn't be at all surprised to see even some of the other big players in the industry go to the wall.
Just as house price bubbles eventually burst and prices end up falling back to levels that will keep the market going, so in the end I think we have to accept that ruthless price cutting in the travel industry in order to attract our business will eventually cause the market to fail with TOs going out of business and we'll just have to get used to paying more for our holidays again.
I can't see how or what sort of law could be written to stop this happening - TC's problems stem in very large part from them trying to undercut their competitors in a market that seems to be largely driven by price and not quality of service (how else to explain the continuing profitability of the likes of Ryanair?) but then getting their sums wrong about just how far they could cut their profit margins and still not just cover their costs but generate a profit for their shareholders. Something had to give - and unfortunately it could be the hard earned holidays of some customers.
To be honest, I think Thomas Cook's days are numbered - selling some of their assets is likely to end up just being a stopgap unless they can persuade us customers to start paying more for the product they have to sell. And we've shown a marked reluctance to do that.
SM
Sorry, I'm going to have get used to more carefully proofreading posts before hitting the 'send button' now that we can't edit posts! Ryanair is also profitable but I really meant to say 'popularity'!
AM
AM
SMa, I totally agree. Thomas Cook sold too cheap and went for volume, but it doesn't matter how many bums you put on seats if you're not making anything out of it. They've damaged their own business, but also lots of smaller businesses. They used to undercut the agents' nett prices and made it very hard for them to compete so not sure that TC could have been making much, if anything, on lots of their bookings.
Today people seem to book on price, which to my mind is never good. They buy cheap, then complain when the customer service is lacking, they swap airlines etc. TC prices have risen, and by the number of complaints, quite a lot on lot's of holidays and flight only bookings. People just have to get used to paying realistic prices for their holidays.
Today people seem to book on price, which to my mind is never good. They buy cheap, then complain when the customer service is lacking, they swap airlines etc. TC prices have risen, and by the number of complaints, quite a lot on lot's of holidays and flight only bookings. People just have to get used to paying realistic prices for their holidays.
hi....they are still selling holidays online as per normal....how can they moraly do this knowing there is the risk of administration.....and would people who have read that article be willing to book with them now...if there was a realistic chance of things working out.... leaking this information...will make that harder to achieve now ....
My first thought was ...glad didnt book sept with them...need do a DIY....but you could do a DIY and land up with no flight...so its a mine field these days just trying to book a holiday....they insist on having cash upfront...and its us basicaly taking a gamble untill we arrive safely home again from the holiday...tweetie
My first thought was ...glad didnt book sept with them...need do a DIY....but you could do a DIY and land up with no flight...so its a mine field these days just trying to book a holiday....they insist on having cash upfront...and its us basicaly taking a gamble untill we arrive safely home again from the holiday...tweetie
Why shouldn't they keep selling holidays? If they stop selling they will cease trading! I really can't see the shareholders being stupid enough to vote against what TC are proposing to do. I would think there are a few companies and airlines that are trading knowing they are struggling, not just TC. All the information about their trading figures on their website for everyone to see. If I wanted to book with TC what I've read today certainly wouldn't put me off. They're not just going to pull the plug and shut up shop overnight. All they're saying is if shareholders don't support the move, it could jeopardise the recent £1.4 billion refinancing package which gives them a further three years to repay their debts. They are already financed through to April 2013.
It's got nothing to do with morals, there is no morality in buisness there never has been and never will be. All companys trade up until the night before they go pop. Why should they be any different from Clintons, or Woolies, or Laker were.
If they suddenly stop trading what about all the 1,000 and 1,000 of jobs that could be lost ? Surely they are as important if not more so than a holiday?
Work is someones roof over their head, food on their table and heating bills, a holiday is a luxury to all intents and purposes, not. one of lifes essentials
Anybody who has booked a Thomas Cook holiday has gone it to it with their eyes open, they have been reporting problems for the best part of two or three years maybe more. But people have still booked with them because of their cheap prices.
I will probably book with them myself to go away in the Autumn, but am aware that I may be taking a chance. I certainly dont want them to stop trading or that will be the last ounce of comptetiton gone from the package holiday market.
If they suddenly stop trading what about all the 1,000 and 1,000 of jobs that could be lost ? Surely they are as important if not more so than a holiday?
Work is someones roof over their head, food on their table and heating bills, a holiday is a luxury to all intents and purposes, not. one of lifes essentials
Anybody who has booked a Thomas Cook holiday has gone it to it with their eyes open, they have been reporting problems for the best part of two or three years maybe more. But people have still booked with them because of their cheap prices.
I will probably book with them myself to go away in the Autumn, but am aware that I may be taking a chance. I certainly dont want them to stop trading or that will be the last ounce of comptetiton gone from the package holiday market.
fred olsen cruises have stopped taking bookings from thomas cook .
have a had letter to state they will not accept them
have a had letter to state they will not accept them
They're not just going to pull the plug and shut up shop overnight. All they're saying is if shareholders don't support the move, it could jeopardise the recent £1.4 billion refinancing package which gives them a further three years to repay their debts. They are already financed through to April 2013.
----------------------------------
That is good to know...but they say if not a yes vote ...administration...and its worrying when other holiday companies are refusing their bussinnes...do they have a better knowledge base than we do...why send letters to the likes of johndoe ...he says
fred olsen cruises have stopped taking bookings from thomas cook .
have a had letter to state they will not accept them
So its not just me is holding fire....fred olsen cruises have took the bullets out of the gun....tweetie
----------------------------------
That is good to know...but they say if not a yes vote ...administration...and its worrying when other holiday companies are refusing their bussinnes...do they have a better knowledge base than we do...why send letters to the likes of johndoe ...he says
fred olsen cruises have stopped taking bookings from thomas cook .
have a had letter to state they will not accept them
So its not just me is holding fire....fred olsen cruises have took the bullets out of the gun....tweetie
Thomas Cook has warned shareholders that unless they approve the sale of some of its aircraft and its interest in a Spanish hotel chain, the tour operator may be forced into administration
They are not saying if the shareholders don't approve their proposals they WILL go in to administration, they are saying they might be forced in to administration, don't read too much in to this as all they are trying to do is force the shareholders to agree by outlining the extreme worst case scenario using scare tactics, one of the oldest tricks in the book.
and the more people that hold fire, the worse the position of Thomas Cook becomes! If everyone stops, they won't need the shareholders to turn down their proposals, their customers will do the job for them. I'm really not sure what the point of holding fire is, from an individuals point of view. Their holidays are protected. Pay with a credit card for extra insurance. If they do go, holiday prices will rise anyway, so you're not really saving anything.
Kiltman, I totally agree with you. Put the information in the public domain, and heap pressure on the shareholders to 'do the right thing'. They'll have a ready made excuse if they don't. Blame the shareholders!
Dont know what is exactly going on with Thomas Cook, but it dosnt make good reading in the newspapers
I,m very concerned about booking with Thomas Cook, even though the holiday is for 2013, so a good 14 months away, its something I dont want to risk doing, and more likely to go with Thomsons for the time being
I know were all protected by ABTA, and if Thomas Cook went under, say round Jan 2013, I would get my money back, but as for the holiday, that would be lost, and then try to book a holiday for July 2013 in July for 1 person in Italy might be impossible
Thomas Cook share down 11% to 16p, share holders as of yet havnt backed Thomas Cokk proposals
I,m very concerned about booking with Thomas Cook, even though the holiday is for 2013, so a good 14 months away, its something I dont want to risk doing, and more likely to go with Thomsons for the time being
I know were all protected by ABTA, and if Thomas Cook went under, say round Jan 2013, I would get my money back, but as for the holiday, that would be lost, and then try to book a holiday for July 2013 in July for 1 person in Italy might be impossible
Sunaddict wrote:If everyone stops, they won't need the shareholders to turn down their proposals, their customers will do the job for them.
There so much uncertainty with Thomas Cook, so how many holiday makers inline with me, dont go and book with Thomas Cook, but insted go to one of the other travel companies
At the minute Im not booking with them, honestly cant trust that in 6 months they will be no more, we really need some sort of assurance from Thomas cook, that three finacila problems have for once and for all been dealt with
Lots of people will look elsewhere, which will only hasten their demise, the price of holidays will rise considerably, and then the same people will be complaining that the cost of holidays has risen.
There are other companies out there in not very good financial shape, but just because we don't hear about it every week, doesn't make them any safer.
There are other companies out there in not very good financial shape, but just because we don't hear about it every week, doesn't make them any safer.
I agree with you joseph- I for one have booked with another tour operator for 2013-(the reason being all the uncertainty - plus the fact thomas cook have scrapped all their fights from our local airport as well!) -for god sake they were bailed out with millions only a few months ago- and now they are sending letters out saying they may go into administration- isn't very reassuring is it? I don't blame folk for booking elsewhere- . Most folk work their backsides off all year to enjoy a holiday- why should they have to have the worry of "Will I get away" "Wont I get away"- sorry if i sound harsh - but thats my opinion!
We go away with them in 6 weeks- if they do go bust- I wouldn't have the money to re book somewhere else until abta/atol sorted it out-(That is if abta could cope with this financially)/or credit card companies.
belly
We go away with them in 6 weeks- if they do go bust- I wouldn't have the money to re book somewhere else until abta/atol sorted it out-(That is if abta could cope with this financially)/or credit card companies.
belly
David Cameron said months back that if Thomas cook were to collapse it would be a catastrophe. So the answered would probably be no we would not get our hard earned money back. I am also booked to go in 9 weeks. But I am keeping positive.
Post a Reply
Please sign in or register an account to reply to this post.
Similar Topics
-
Thomas Cook in store -v- Thomas Cook On line
Posted by briggsy2007 in Tour Operators and Travel Agents
-
Thomas Cook
Posted by muppetdodger in Holiday Complaints
-
Thomas Cook IFE
Posted by dave dee in Flight Only / Airline and Airports
-
Tui or Thomas cook?
Posted by mari in General Holiday Enquiries, Hints and Tips
-
So Where Have Thomas Cook Run Off To ?
Posted by Taximania in Goa Discussion Forum