Thomas Cook Group has issued a last-gasp plea to its lenders to reduce a £200m funding demand with Britains oldest travel agent just hours away from possible insolvency.
Sky News has learnt that the company has asked its syndicate of lenders to substantially cut the standby funding they require – or amend its structure – to see Thomas Cook through the winter period.
The lenders were considering the proposal on Sunday afternoon as part of an eleventh-hour rescue package that would prevent the company from collapsing into administration in the early hours of Monday morning.
Alongside the request to the lenders, credit card companies have been asked to release £50m of cash they are holding as collateral against Thomas Cook bookings, according to a source close to the travel agent.
Fosun Tourism Group, which has committed £450m to the rescue of Thomas Cook, is unlikely to increase its contribution although bondholders are thought to have been asked to contribute an additional sum to plug the remaining funding gap, according to insiders.
Discussions about the possible rescue were continuing on Sunday afternoon at the office of Latham & Watkins – with the meeting venue switched at the last minute after Sky News revealed the original location on Saturday night.
Sources said the fact that talks were ongoing was positive but said Thomas Cook's fate was still hanging in the balance.
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Unless they are confident that a deal can be struck to salvage the company's future later in the evening, board members will appoint administrators from AlixPartners.
If it does collapse, Britain's biggest-ever peacetime repatriation operation would be triggered, requiring approximately 165,000 holidaymakers to be flown back to the UK.
The Civil Aviation Authority is leading the exercise, which has been code-named Project Matterhorn.
In recent days, the London-listed company has explored a multitude of options to raise the remaining £200m demanded by its banking syndicate two weeks ago.
That £200m request took the overall size of a rescue package from £900m to £1.1bn, with the original sum comprising £450m from Fosun and the other half from lenders and bondholders.
Many of those have been discounted because there is insufficient time to implement them before Thomas Cook runs out of money.
A plan for Triton Partners to buy Thomas Cook's Nordic operations was still under discussion earlier in the weekend, as was a proposal to keep its airlines in the UK, Germany and northern Europe out of administration while letting its British tour operating arm fail.
However, one insider suggested that neither was likely to be viable.
A separate discussion between the company and CQS Management, the hedge fund, to provide a chunk of the additional funding was also aborted in the last fortnight.
One source suggested that the company had not entirely discounted the possibility of the government providing some short-term funding on commercial terms, despite comments by Dominic Raab, the foreign secretary, who appeared to cast doubt on the idea.
Union bosses urged ministers to nationalise Thomas Cook on Sunday, arguing that the cost of doing so would be trivial in the context of the bank bailouts of 2008.
Weak trading, which company executives have partly blamed on Brexit-related uncertainty, has forced them to increase Thomas Cook's financing requirements several times in recent months.
Sky News revealed on Thursday that Thomas Cook, which was founded in 1841, was expected to crash into administration as soon as Sunday night unless the £200m funding gap could be filled.
More than 20,000 jobs across the group are at risk if it collapses, with 9,000 of those jobs in the UK.
Several hundred thousand people from other European countries are also current customerRead More – Source