Business

Thomas Cook receives approach from China's Fosun

Thomas Cook plane Image copyright Reuters
Image caption Thomas Cook is already trying to sell its fleet of planes

Troubled travel company Thomas Cook has received a takeover approach for its tour business from a Chinese firm.

China's Fosun is already Thomas Cook's largest shareholder, and also owns the Club Med holiday business.

Last month, Thomas Cook reported a £1.5bn loss and said there was "little doubt" that Brexit had caused customers to delay their summer holiday plans.

The firm has annual sales of £9bn, 19 million customers a year and 22,000 staff operating in 16 countries.

Thomas Cook - which was founded in Market Harborough in 1841 - said it was in talks with Fosun, but added there could be "no certainty that this approach will result in a formal offer".

Last month, Thomas Cook's shares fell sharply on fears over its financial strength. Its stock sank 30% in one day after analysts at Citigroup said the company's shares were "worthless".

The travel firm has issued three profit warnings in a year, and is struggling to reduce its debts.

News of the talks with Fosun - which also owns Wolverhampton Wanderers Football Club - triggered a 20% jump in Thomas Cook's share price, to about 19p. However, this is still well below the 150p level they stood at last summer.

Thomas Cook is already trying to sell its airline business, and last month said it had received a takeover approach for its Nordic operations from private equity group Triton.

The travel firm has closed 21 of its stores, and more outlets are expected to go. Its currency arm Thomas Cook Money is under review and the company has said more "cost efficiencies" are planned.

However, the company has sought to reassure holidaymakers, telling customers last month that it was "business as usual".

At the time, Thomas Cook said: "As an ATOL-protected business, our customers can have complete confidence in booking their holiday with us."

Protection under the ATOL - or Air Travel Organiser's Licence - scheme means UK travellers on an air package holiday do not lose their money or become stranded abroad if a holiday firm collapses.

It also covers many charter flights and means that, if the operator collapses while people are away, they can finish their holiday and be flown home at no extra cost.

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