UK government investigators will be asked to prioritise a probe into the collapse of leisure firm Thomas Cook Group, following its failure to secure a rescue deal with Chinese firm Fosun Tourism Group.
Fosun had been approached, earlier this year, to take part in a recapitalisation of Thomas Cook and had been prepared to invest £450 million as part of a broader £900 million rescue deal. But the tentative agreement fell apart when Thomas Cook was unable to source another £200 million to assist with relieving seasonal pressures.
The Chinese company says it is “disappointed” that Thomas Cook was unable to find a “viable solution” for the recapitalisation with other parties, including its banks and bondholders.
Fosun, a minority investor in Thomas Cook, insists its own position “remained unchanged” throughout the process but adds: “Unfortunately other factors have changed.”
Business secretary Andrea Leadsom says she will write to the Insolvency Service – the government agency which deals with financially-distressed firms – asking it to “prioritise and fast-track” an investigation into the circumstances of Thomas Cook’s liquidation.
“The investigation will also consider the conduct of the directors,” says the UK department for business, energy and industrial strategy.
Cross-government panels will be convened to support employees and monitor the impact on local stakeholders.
The government opted against offering financial aid to Thomas Cook, a position which has been sharply criticised by employee representatives.
Pilots’ union BALPA claims that staff have been “stabbed in the back” after weeks of having their futures being “secretly decided”. The union says the situation is “despicable”.
The independent travel trade union TSSA says it is seeking “urgent meetings” with administrators to explore options for saving Thomas Cook.
“[We] hope that the company can be sold as a going concern to new investors rather than being thrown on the scrap-heap,” says TSSA general secretary Manuel Cortes.
Cortes says Fosun Tourism Group had “clearly” shown a “genuine interest” in the brand, but acknowledges that any rescue is likely to be “far more difficult” as a result of government “inaction” to support the company.
He adds that Andrea Leadsom’s inquiry into the collapse “must include the government’s response – or lack of response”.
UK prime minister Boris Johnson is widely reported as having told journalists that bailing out Thomas Cook would have created a “moral hazard” with regards to dealing with other companies facing financial difficulties.