23rd Sept, 2019- UK based travel firm Thomas Cook file for bankruptcy, leaving some 600,000 holidaymakers stranded and sparking the UK’s biggest repatriation since World War II.
The 178-year old debt ridden firm, which had struggled against fierce online competition has failed to secure 200 million pounds (USD 250 million, 227 million euros) from private investors and collapsed in the early hours.
Bankruptcy, which followed a lengthy period of chronic financial turmoil after a disastrous 2007 merger deal, left some 600,000 tourists stranded worldwide according to Thomas Cook, while its 22,000 staff are now out of a job.
The British government launched emergency plans to bring some 150,000 UK holidaymakers back home from destinations including Bulgaria, Cuba, Turkey and the United States.
Thomas Cook said in a statement that “despite considerable efforts”, it was unable to reach an agreement between the company’s stakeholders and proposed new money providers.
“The company’s board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect,” it added.
The long-troubled group has also been blighted by enormous costs arising from its disastrous 2007 merger with MyTravel, a deal which left it plagued with huge levels of debt.
The UK government said Monday it had hired planes to fly home British tourists, in a mass repatriation plan codenamed Operation Matterhorn which began immediately.
As well as grounding its planes, Thomas Cook has been forced to shut travel agencies, leaving the group’s 22,000 global employees 9,000 of whom are in Britain out of a job.
Chinese peer Fosun, which was already the biggest shareholder in Thomas Cook, had agreed last month to inject 450 million pounds into the business as part of an initial 900 million pounds rescue package.
In return, the Hong Kong-listed conglomerate was to acquire a 75 percent stake in Thomas Cook’s tour operating division and 25 percent of its airline unit.
“Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalisation with other affiliates, core lending banks, senior noteholders and additional involved parties,” the Chinese group said in a statement to Pixr8 on Monday.