Reuters: RIP Thomas Cook: holiday dreams washed away by tide of debt24 September 2019 | 02:10 | FOCUS News Agency
But behind the glossy brochures, it was struggling to adapt to market changes: while taking over rivals delivered short-term savings, it propelled the British brand toward a $2.1 billion debt pile that would ultimately seal its fate.
It narrowly avoided collapse in 2011 when, reeling from the Arab Spring, Icelandic volcano and a squeeze on British incomes, it had to beg for a 200 million pound ($249 million) lifeline.
Eight years later it was in the same position, but its creditors had enough. With the business draining cash, Chief Executive Peter Fankhauser found its lenders, bondholders and even the government were no longer willing to step in.
Its collapse in the early hours of Monday left hundreds of thousands of people stranded at holiday destinations around the world and the British government leading the biggest peacetime repatriation in British history.
One person familiar with the situation said lenders and bondholders had backed Thomas Cook through the busy summer months, when up to 2 million people were on holiday in peak weeks, and then pulled the plug at the first opportunity.
“It wasn’t a deal (the lenders) wanted to do,” the person said, speaking on the condition of anonymity. “It is exposed to events that can’t be predicted, they didn’t understand it.”
The British government decided Thomas Cook was a bet it did not want to take after the banks had lost patience.
Media reports in recent weeks had prompted suppliers to call in debts and future customers to go elsewhere, draining the business of the cash it needed to continue. “It got to a full scale run on the business,” the person said.
© 2019 All rights reserved. Citing Focus Information Agency is mandatory!