Thomas Cook financial woes

[cwatters]

Correct. The rotten-to-the-core UK press will try to demolish TCX, forgetting the millions of £ of advertising placed on their pages by the same company. Let's hope the Daily Mail, Express, and Sun all fold soon. Pity we cannot help them with some nasty publicity. That is sadly their domain. As it is with the BBC.

Check out this graph..

THOMAS COOK GROUP PLC 7.75% GTD NTS 22/06/17 (BR) £ Share Price - Shares - London Stock Exchange

It suggests the potential problem at TC has been know since at least end June. The media could have stuck the knife in before TC made their press release.

[HH6702]

Thomas Cook Group to close all group airlines

hi

Been reading this over last few days.
With the high cost of fual and maintence costs do you think that Thomas cook may close all the groups airline down and bring in the likes of Ryanair/Easyjet/BMIBaby to do the flying programme?

Would this save the group money long term??

Over winter the group has to find flying for the 50+ aircraft.
some go to canada others may do 1 flight per day.

If the group looses money more in the winter time this makes sence.

sorry i know this will upset some cabin crew but thomas cook needs to act now and getting more money from banks isnt the anwser all it does is delay getting rid of the debt and increasing what they owe....

[Too Low Terrain]

The low market capitalization of TCX makes it very difficult to raise fresh money. Remember, an investor will ask for securities and assets to cover his financial risk apart from a high interest rate. It would not surprise me if major financial partners/banks already have their hands on the profitable sisters in Scandinavia and Germany.

TCX´s last 2010 bonds were issued with beween 6% and 7.5% rates (google), so if you assume this is the average rate for the £1bn debt they apparently have, we speak of interest payable of £60m minimum per year.

Air Berlin in Germany, in a similar situation, recently issued a €100m bond with a coupon of 11.5% (!) in dire need of fresh capital.

The interest rates payable for TCX to raise new capital will increase.
If they really had such big assets as owned planes etc, there would be no reason for the shareprice to plummet to a market capitalization of just £96m.
This is the price of a single A330 and they operate some 40 or so aircraft of which for sure they own a few...

Guess some people know a bit more already...

[IainB]

Some personal experiences of TCX

First one was a holiday a couple of years ago where we wanted a certain hotel in a certain location. Could only be booked through TC, so got our local TOM shop to do it for us - and got a good price match on the tinternet price. All went swimmingly until the pick-up from hotel for our journey home. Despite being the nearest hotel and resort to the airport, we were picked up a couple of hours before departure time. Massive queues at check-in and passport control which meant the flight was called as the bloke was glaring at my picture on the passport, leading to a bit of a sprint once we cleared the desk. I e-mailed TC to suggest that a reschedule on the bus times might be a good idea and got a snotty reply stating that because it was booked through TOM, it was down to them to sort out and not TC. OK, technically, my contract was with TOM, but TC were the service provider and realistically couldn't give two about the standard of service provided. I asked at our local TOM shop about taking it further and was advised that it wasn't worth it as Head Office would take great pains to ignore me.

The palaver I went through in buying some vouchers for a friends wedding present at the Thomas Cook shop had to be seen to be believed. Photo ID required and all sorts, could only pay in cash not card, plus they wanted the address of the person who was going to receive the vouchers. They couldn't find the address either on the search system and claimed it didn't exist, which was strange as I'd been there numerous times.

Final one is the weird exchange rate fiasco where you only get the advertised rate if you have booked a holiday with them and cash a certain amount. Standard rate is substantially less than the advertised one, I can tell you.

Is it any wonder the company is going Tango Uniform?

[cldrvr]

Guess some people know a bit more already...

Their biggest shareholder cuts its stake in half 2 days ago, from almost 9% to less then 5, at a significant loss to them, and guess what, they are one of the 17 banks providing their credit line. They have been steadily reducing their stake for the last 2 months

Thomas Cook Group PLC - Holding(s) in Company
Thomas Cook Group PLC - Holding(s) in Company

IF a company renegotiates their creditline upwards by 25% and then comes back a few weeks later for another 100Mn, that does not look good.

Furthermore TCG themselves abandoned a 400Mn rights issue this week, not surprising when your company is barely worth 100Mn

Manny stepped down as CEO only 2 months ago after the third consecutive profit warning in a year.

I am fully aware that there are some 30,000 employees involved in this saga, but let's not jump on the Thomas Cook bandwagon and go blaming the press here, they brought it upon themselves.

Let's see their financial report when it finally gets released and see how their forward bookings are fairing, a drop of 20-25% year on year would not surprise me, if the appointment of administrators does not beat the release of the report first.

The banks have already appointed a debt advisor:

Thomas Cook's banks appoint adviser: sources | Reuters

But heh, let's blame the media for this mess, I am surprised how well behaved the media has been, they showed up a bit late to the party. TCG's problems didn't start this week when the media finally reported it, there has been months worth of trouble leading up to it.

The largest shareholders are bailing out, their debt has been valued down to 57%, we have seen profit warnings all year, why should the media not warn potential customers of the trouble the company is in.

[TURIN]

But heh, let's blame the media for this mess,

Yes, of course TCG got in to this themselves but it doesn't help their position when the general public read crass adverts and hyped up headlines proclaiming the company is a dead duck.

If this story stayed within the confines of the business pages most of us would be none the wiser and would have continued to book our holidays based on face values of the product. As it is now even the most die hard TC supporters amongst are going to find it difficult to put hand in pocket and part with hard cash after reading some of the guff in the press. Result is that instead of the banks attempting to support the company knowing well that bookings are returning they now know everyone is running scared, completely bonkers!
I'm not saying the public should be kept in the dark but the press has a duty to give accurate factual information without hyperboly (sp?).

Ryanair?

[PPRuNe Pop]

We know about the posting times and WE can do nothing about it. The owners are also aware. As to when it will be fixed - your guess is as good as mine.

Just keep posting time is only time which only goes one way.

PPP

[PPRuNe Pop]

I posted a comment that should have been been as 100 but instead dropped back to 89. See what I mean. The owners have not addressed this problem - yet.

God knows where this post will end up!


PPP

[cldrvr]

Yes, of course TCG got in to this themselves but it doesn't help their position when the general public read crass adverts and hyped up headlines proclaiming the company is a dead duck.

The company is a dead duck by their own admission, they ran out of cash and are worth peanuts.

this story stayed within the confines of the business pages most of us would be none the wiser and would have continued to book our holidays based on face values of the product

TCG as it stands is not going to survive in its current form, so you want the media to keep quiet so that the uninformed punter can continue booking a holiday that he/she would never get to enjoy.

TCG maybe ATOL protected and the punter will get his money back, however he will not be able to book another holiday at that time.

But you prefer to keep the trouble the company is in a secret from the masses so they can use the booking fees to get through the winter when the banks are unwilling to keep them afloat?

Result is that instead of the banks attempting to support the company knowing well that bookings are returning

The banks tried that a few weeks ago when they negotiated an increase to TCG's creditline to get them through the winter, here we are only a few weeks later and TCG once more is out of cash, so you want 17 banks to throw good money after bad? Wouldn't you prefer the banks to use that money instead on viable and profitable companies?

We don't know that bookings are returning, TCG delayed their financial report. But would they really need another 100Mn so soon if they were?

the press has a duty to give accurate factual information without hyperboly

The press are only reporting what TCG themselves released to the public, not based on rumours, just on facts. TCG is out of money, the banks won't lend, the shareholders are bailing out, their existing debt facevalue is being written down.

But your solution is to keep quiet, take as much money as you can from unsuspecting punters and hope the company is going to survive?

Ryanair?

Ryanair's ad may be bad taste, but again, they are not wrong and Ryanair only has an obligation to extract as much value as they can for their own shareholders, not participate in what you want, a massban on reporting the trouble TCG is in.

The genie is out of the bottle, TCG themselves let it out, you can of course wish it back in, but that is not going to happen.

[Narrow Runway]

Hang on a moment everyone.

I don't recall anyone saying that TCG had run out of money, or that all the extra £100mn facility that was negotiated about 5 weeks ago has been spent.

What TCG said is that they have had a significant downturn in trading in recent times and that they are going to their lenders in order to renegotiate loans and terms - perhaps seeking further funding.

If they had "run out of cash", then that would make them technically insolvent I believe. It is an offence for Directors to knowingly trade whilst insolvent.

I don't think it looks brilliant, but I don't think it is quite over yet.

Despite a bounce from 10p to about 18p, I'd not be a buyer of the shares until further details are divulged in the accounts announcement.

I would however book a holiday with them even now, because you'll get your money back if it all goes belly up.

[cldrvr]

Hang on a moment everyone.

I don't recall anyone saying that TCG had run out of money

Here you go:

Thomas Cook Group plc announces that as a result of deterioration of trading in some areas of the business in the current quarter, and of its cash and liquidity position since its year end, the Company is in discussions with its principal lending banks with regard to its facilities during the seasonal low period of cash in the business.

Thomas Cook Group PLC - Update

Are they out of cash today? Probably not, as you say it would be illegal to continue trading when insolvent.

Do they have enough cash to get through Christmas? No, they most likely don't or else they would not have released the above statement.

I would however book a holiday with them even now, because you'll get your money back if it all goes belly up.

Granted you would get your money back, eventually, you would however not get to enjoy your holiday and would be hard pressed to find an alternative.

I don't think it looks brilliant, but I don't think it is quite over yet.

I agree, something will arise out of this mess. The banks will do their best to get at least part of their original investment back, hence the appointment of a debt advisor today.

[paully]

Things are on the up, the banks will bail them out, albeit with strings attached ,the Government has arm twisted the banks who seem to have realised they have more to lose by flushing TC away, as a result their share price has started to rise, albeit from a low base. Must be good news for their employees.

Re the media, sorry they are the ones to blame. Doom and gloom from every crack and orifice of the gutter press. Just look at the world around you, the shops are busy, people are spending (and this well before the Xmas rush), there are still millions in work and will continue to be. What will happen now is that spending will be lower and sustainable, pretty much what it should have been instead of the `years of excess`..Now if they could be forced to shut up about it and the BBC dismantled () we would sort ourselves out over the next few years in a steadier way.

Instead we will still have stories about declining sales of Gucci handbags and how we are in a slump due to not having 3 jollies a year etc etc ...Tors

Best of luck to all those at Tommy Cook I hope you have a better Christmas

[FANS]

MODS - what is going on with this thread? Posting times are all wrong.

This is a key thread at the moment.

[El Grifo]

Well !!!

You tell the Feckers Jock They just love the Gloom and Doom scenarios

Thomas Cook agrees £200m loan deal with banks - www.travelweekly.co.uk

This is crap ! I posted this at 22.58 and it appears now. Bad, bad and double bad

[El Grifo]

sdjnf;ukdsnv;jsn;kj\cnv;\kn;uj\is

22.30 friday night. What is going on ?????

[PPRuNe Pop]

I am closing the thread until early a.m. tomorrow to see if the problems with time lapses gets cleared or is cleared. At the moment people who post may see their posts with up to 6 hours before the time they actually posted.

PPP

See you in the morning.

[rumair999]

Maybe the thread should be closed down, stop the papers taking qoutes from all the experts talking rubbish on here.

I repeat this is the last thing the UK and Europe needs at the moment,

They are not going anywhere and people should you start supporting not knifing

[FANS]

These things can be self fulfilling, but who would book anything with TCX now?

[Shed-on-a-Pole]

This discussion is not a matter of choosing whether to "support" or "knife" TCG. Put emotion aside; we are talking about the financial viability of a troubled business here. The issue is that a publicly listed company has issued a news release to the London Stock Exchange which indicates a very grave financial situation. And it is the latest in a series of such news releases from this company. I'm sure most of us reading this thread would like to see TCG survive and prosper, but it is not reprehensible to report and appraise the prospects for the company going forward in an honest manner. The media's role is that of messenger in this situation ("don't shoot etc.") and it is fulfilling its duty to keep its readers / viewers informed. If blame is to be apportioned, then it lies with some who made management-level decisions at TCG, and not with any newspaper editor.

Personally, I wish all staff at TCG well. I sincerely hope that the bulk of the group can be sold on to a financially strong player in the travel industry if it cannot be saved as a standalone operation. Thomas Cook is an iconic brand, and I hope to see it around still ten years from now ... albeit (most likely) under new ownership.

[paully]

``The media's role is that of messenger in this situation ("don't shoot etc.") and it is fulfilling its duty to keep its readers / viewers informed. ``

You obviously havent read the Daily Mail recently then