Cook says no to £400m package

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Holiday firm Thomas Cook is understood to have rejected a £400m package put together by industry veterans to turn the company around.

The group, which last year turned to its banks for a lifeline following dire trading, was approached by former Airtours executive Terry Fisher and Clive Jacobs, the founder of car rental business Holiday Autos.

Their initiative, which they said had the support of one of the largest shareholders Invesco, would have injected £400m into the business ahead of a larger rights issue, while they would have become co-chief executives.

But the plan, which would have been partly funded with the veterans’ own money, was rejected by chairman Frank Meysman and is now understood to have been dropped altogether.

The group recently said it was progressing with its turnaround plan for the UK business, which includes focusing on fewer and better quality hotels and a drive for more online bookings.

Thomas Cook has struggled in recent months as the poor economic climate in the UK has hit holiday bookings, leading to a series of profit warnings and the exit of chief executive, Manny Fontenla-Novoa.

There have also been fears that the company, which has nearly £900m of debt, would breach its banking covenants.

The 170-year-old group reported pre-tax losses of £151.7m in the three months to December 31, fuelling fears that its highly-publicised woes were deterring holidaymakers.

New chairman Mr Meysman plans to turn the company around, by selling £200m of assets over the next 18 months.