China’s Fosun in talks on future of Thomas Cook tour business

Guo Guangchang, the chairman of Fosun International. (Reuters)
Updated 13 July 2019

China’s Fosun in talks on future of Thomas Cook tour business

  • Proposed deal would be most significant purchase of a British company by a Chinese group in years

HONG KONG: China’s Fosun Tourism Group is in advanced talks with Thomas Cook Group and its lenders regarding a combined £750 million ($940 million) fund-raising by the world’s oldest travel company.
The proposed deal would give Fosun Tourism control of the British firm’s core packaged-tour business and minority interest in its airline business, marking one of the most significant purchases of a British company by a Chinese group in years.
Fosun did not say how much of the money it would inject and how much would come from lenders.
The 178-year-old London-listed company has been battered by fading demand for its package holidays, high debt and a hot 2018 summer in Europe, which deterred bookings. The company is also weighing approaches for its airline business and Nordic operations.
“After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing ... the board has decided to move forward with a plan to recapitalize the business,” Thomas Cook Chief Executive Peter Fankhauser said in a statement.
“While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution.”
Thomas Cook, worth roughly $4 billion after it debuted in June 2007, currently has a market value of about $255 million and has seen its stock more than halve in value so far this year.
The tour business of Thomas Cook had 11 million customers in 2018 and produced 7.4 billion pounds in revenue, while its higher-margin airline business — which includes German holiday carrier Condor — made £3.5 billion in revenue.
Hong Kong-listed Fosun Tourism, owner of the Club Med holiday business brand, is already Thomas Cook’s biggest shareholder with an 18 percent stake.
Thomas Cook’s recapitalization proposal may comprise a capital injection and new financing facilities, Fosun Tourism said in a filing to the Hong Kong stock exchange on Friday.
The news comes a month after Thomas Cook said it was in talks with Fosun, after the Chinese firm made a preliminary approach.

HIGHLIGHTS

• Proposal may comprise capital injection, new financing.

• Fosun does not say how much of the money it will inject.

• Fosun may control Thomas Cook’s core packaged-tour business.

“Fosun is a shareholder in Thomas Cook, because it is a British company operating in the global travel industry, in which we have extensive experience,” Fosun Tourism told Reuters in an email on Friday.
“We are committed investors, with a proven track record of turning around iconic brands including Club Med.”
Thomas Cook’s proposal envisions that a significant amount of its external bank and bond debt will be converted into equity, and that existing Thomas Cook shareholders will have their stakes significantly diluted as a result of the recapitalization.
The proposal is subject to due diligence and further discussion, among other things, Fosun said.


At Davos, innovative products point to a sustainable future

Updated 24 January 2020

At Davos, innovative products point to a sustainable future

  • A single tree that to bear 40 different types of apple

DAVOS: The World Economic Forum is not all about the fourth industrial revolution or the rise of AI.

You can also find all manner of strange and intriguing products on display from biodegradable plastic made from algae to wallpaper made from recycled corn husks.

One stand titled “How do you design a tree?” is part of a conservation effort where a single tree is designed to bear 40 different types of apple.

Another stand displays colored seaweed on a rack, showing how clothes can be dyed in a sustainable, non-chemically corrosive manner.

Propped along a large wall is Fernando Laposse’s wallpaper made of variations of purple corn husks that are reinforced with recycled cardboard and cork to create wallpaper and furniture. The husks come from corn that needs very little water and can be grown in the desert, which makes it all the more sustainable.

“This initiative helps the local economy as it brings in jobs and a resurgence of crafts and food traditions while also ensuring sustainability,” Laposse said.

Another display shows a machine that extracts pellets from a mixture of algae and starch and is used to create a thread that is the base of 3D printing. These sustainable, biodegradable plastics made from algae are being experimented with in different regions.

With the rise of deep fakes — a branch of synthetic media in which a person in an existing image or video is replaced with someone else’s likeness — another stand delivers a warning on the looming dangers of unregulated software.

The Davos forum prides itself on its sustainability, and key topics have included climate, mobility, energy and the circular economy. Everything is recyclable, and participants must download an application in order to keep up with the program and any changes — a move to cut down on paper waste.