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News Update: BRITISH TRAVEL GIANT THOMAS COOK COLLAPSES

Team SoOLEGAL 24 Sep 2019 1:10pm

News Update: BRITISH TRAVEL GIANT THOMAS COOK COLLAPSES

Thomas Cook – the British travel giant has collapsed into liquidation on Monday owing to the heavy debts that the company had accrued. The 178-year-old tour company had approached the UK Government for financial assistance after it went under a 1.7 billion pound debt pile but the same was denied by the Government. The company on Sunday, September 22, again tried to strike a deal with its lenders but the said deal also did not get through forcing the company to stand down and halt its operations with immediate effect. 


In August this year, Thomas Cook officials were in talks of securing a deal for about 900 million pounds led by it’s one of the largest shareholders, Fosun - which is a Chinese Firm. But, a recent demand from the lender banks to raise a further 200 million in contingency funds had put the deal in skepticism.


Due to the collapse of the firm, hundreds of thousands of holidaymakers and British travelers are stranded around the globe.


The British Prime Minister has assured of bringing every British citizen home. He also informed the media that the government had rejected a request from Thomas Cook for a bailout of about 150-250 million pounds.


Transport Secretary Grant Shapps commented on the said move made by the government by stating that “I fear it would have kept them afloat for a very short period of time and then we would have been back in the position of needing to repatriate people in any case”.


The Civil Aviation Authority of the UK has informed that Thomas Cook ceased trading and the regulator along with government has arranged a fleet of planes which are braced to bring home more than 150,000 British citizens stranded globally in the next few weeks.


The CAA has also established a website and specialized call center to address queries and confusion of the travelers who belonged to Thomas Cook. Customers are supposed to board specialized free of cost flights or may be booked on to another scheduled airline at no extra cost. Details of each flight and others will be posted on the dedicated website at the earliest.


Chief Executive Officer of Thomas Cook, Peter Fankhauser said in a statement that the present unfortunate scenario of company going out of business and collapsing was a matter of profound regret. Fankhauser has also apologized to the millions of customer and thousands of employees, supplier, and partners who supported Thomas Cook for many years.


However, the Indian, Chinese, German and other international subsidiaries will continue to trade as normal circumstances because from a legal position, the subsidiaries are considered to operate separately from the UK parent company and are also not under the jurisdiction of the Official Receiver of UK. But these subsidiaries do share a few service of the parent company such as aircraft or information technology and will need to strike rescue operations to keep trading in the future.


Tagged: Thomas Cook Collapses   Liquidation   News Update  
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