Thomas Cook Group is in the process of arranging an additional £150 million ($181 million) capital injection – on top of a recently disclosed $750 million financing package – to ensure operations can continue until the summer 2020 season.
The UK-based leisure group says the "substantial new capital investment" is required to gain "further liquidity headroom through the coming 2019-20 winter cash low period and to ensure the business can continue to invest in its strategy".
In July, Thomas Cook disclosed a recapitalisation plan with its largest shareholder, China-based Fosun Tourism Group, and a circle of lending banks, under which "a significant amount" of the leisure company's £650 million bank debt and $1.15 billion bond debt is to be converted into equity.
Talks about the £750 million package with Fosun and the group's "core lending banks" have since made "significant progress towards finalising the key transaction terms", Thomas Cook says.
But the group notes that the plan still is subject to "certain conditions including performance conditions, due diligence, further discussions further discussions and reaching agreement with a range of company stakeholders, including the pension trustees, noteholders, other financial creditors and Fosun's shareholder approval".
Regulatory approval of the financial restructuring is additionally required.
Under the recapitalisation plan, set for implementation in early October, shareholdings of existing investors will be "significantly diluted", Thomas Cook previously said.
Earlier this year, the leisure group disclosed an intention to divest its airline division, which includes operations in Denmark, Germany and the UK.
Thomas Cook has since received multiple bids for the airline division and part of its tour operating business. An update on the process is scheduled for September.
Proceeds from the airline sale would be used for an group-wide overhaul to enable Thomas Cook to focus more on its own hotels, revamp its online presence and shift its hotel portfolio from a franchise model to more management contracts.
An earlier version mistakenly listed Belgium rather than Denmark as a country in which Thomas Cook has airline operations