Sectors > Top Reports > Thomas Cook Memo 150719

Thomas Cook Memo 150719

Buy € 6.25% 2022 Senior Unsecured Bonds. Worth c. 60% near-term, more thereafter through post-reorganization equity
PUBLISHED: 15 July 2019
SUBMARKET: Top Reports, Top Reports,


Why Read?

  • Understand how the planned £750m recapitalisation and debt restructuring is likely to be implemented and the likely near-term and longer-term “recovery” rates for senior unsecured bonds
  • Understand the key points of negotiation, in particular between Fosun and bondholders
  • Understand the IRRs achievable for bondholders and existing shareholders by participating in a restructuring and recapitalisation respectively
  • Understand the pro forma financial position of the carved out Tour Operator and remaining Airline / holdco
  • Understand key elements of a turnaround plan for Thomas Cook’s Tour Operator

What’s New?

  • Details of our restructuring model for Thomas Cook and resultant recovery rates / IRRs for senior unsecured bondholders

Questions Answered

  • What can senior unsecured bondholders expect to receive in an exchange of their bonds for post-reorganisation equity and new debt in the Tour Operator and post-reorganisation equity in the remaining Airline / holdco and what will this package be worth, both in the near-term and over time as a turnaround plan is implemented?
  • How likely is it that a consensual recapitalisation and restructuring can be negotiated between Fosun, Thomas Cook, bondholders and banks?
  • How can holdouts be disincentivised?
  • Should bondholders try and gain a larger percentage of the post-reorganisation equity by themselves injecting new money into Thomas Cook (in place of, or alongside, Fosun)?
  • What are the key points of negotiation, in particular between Fosun and bondholders?
  • How would the pro forma financial position look of the carved out Tour Operator and of the remaining Airline / holdco?
  • What IRRs are achievable on new investments in Thomas Cook – whether buying its bonds to restructure into equity; for existing shareholders potentially participating in the recapitalisation alongside Fosun; for Fosun?
  • What are the key elements needed to turn the Tour Operator around and can they be achieved?

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