Thomas Cook is desperately scrambling for £200 million to save the company and 21,000 jobs.
Bosses admitted this morning that it’s facing a huge funding black hole and shareholders have been warned there is a ‘significant risk of no recovery’.
The world’s oldest holiday company is facing a takeover bid from Chinese firm Fosun, but it risks going bust as early as this weekend if they don’t find the money in time.
Tourists have been assured their holidays are safe, but as many as 180,000 customers could be stranded abroad if Thomas Cook does collapse.
That would leave the taxpayer facing a bill of around £600million to get those people home.
How to get your money back if Thomas Cook goes bust
Package holidays with the travel firm are Atol protected, meaning you will not face any extra cost and there would be refunds for planned holidays that don’t happen.
But what does this mean for you if you’ve already booked your next holiday with Thomas Cook?
Atol, which stands for Air Travel Organiser’s Licence, is a scheme which protects customers if a travel company they booked with stops trading.
This stops you becoming stranded abroad or thousands of pounds out of pocket.
Every UK travel company which sells package holidays and flights is required to hold an Atol.
But Atol protection does not apply if you booked your flights or accommodation separately.
In that scenario, you may have to claim back costs from your credit or debit card provider.
Credit card bookings between £100 and £30,000 are protected under Section 75 of the consumer credit act, while debit card bookings can be recovered using charge back.
Many holidaymakers have already expressed concerns about the future of the company, but Thomas Cook social media staff tweeted ‘there is nothing to be worried about, all of our flights will be operating as normal and will be for many more years!’
Despite this optimism, the company said the scramble for cash is expected to significantly dilute existing shareholders’ stakes in the firm.
In a statement, Thomas Cook said: ‘Discussions to agree final terms on the recapitalisation and reorganisation of the Company are continuing between the company and a range of stakeholders.
‘These discussions include a recent request for a seasonal standby facility of 200 million pounds, on top of the previously announced 900 million pounds injection of new capital.’
Guy Anker, of the Moneysavingexpert consumer website, said: ‘This is extremely worrying news for hundreds of thousands of people who have booked holidays with Thomas Cook, particularly those who are abroad already.’
A source close to the discussions said on Thursday that Royal Bank of Scotland (RBS) had hit Thomas Cook with a last minute demand for the extra funding, adding that the situation ‘was becoming more critical’.
A spokesman for RBS said the bank did not ‘recognise this characterisation of events’ and was working with all parties to ‘try and find a resolution to the funding and liquidity shortfall at Thomas Cook.’
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