Thomas Cook, the world's oldest travel company, is reported to be days away from collapsing into administration - stranding 150,000 customers abroad and putting 20,000 jobs at risk.
The company is racing to secure an additional £200million funding to prevent administration - which would mean the Civil Aviation Authority having to repatriate 150,000 UK citizens from foreign soil.
Tour operator Thomas Cook this morning confirmed that it is seeking £200 million in extra funding as it attempts to prevent a collapse.
The company said it is in talks with stakeholders, including leading shareholder Chinese firm Fosun, to bridge the funding gap.
In an update to the market, it said the fundraiser is expected to significantly dilute existing shareholders' stakes in the firm, with "significant risk of no recovery".
Insiders say the bill to the CAA could be £600million – 10 times the cost when Monarch Airlines failed in 2017.
An industry expert said: “Hotels would need to be paid to ensure they don’t kick out guests.”
Thomas Cook was on the verge of securing a £900million rescue deal led by Chinese firm Fosun, owner of Club Med, at the end of August.
But its lenders, led by taxpayer-saved Royal Bank of Scotland, demanded another £200million buffer.
Emergency talks are talking place to try to secure the funding which would safeguard the future of the travel giant and 20,000 workers – 9,000 of them in the UK.
The firm has 560 travel agents but any collapse would lead to shockwaves for other holiday firms that use it, or its airline.
However, time is running out, with insiders saying it has “days, not weeks” to find a solution.
There are reports Thomas Cook may not be able to renew its 12-month operating licence, which ends at the end of September, and that flights could be grounded as early as Sunday this week.
The firm, set up in 1841, is reeling from £1.7billion of debt, dating back to its takeover of MyTravel in 2007.
It has to sell three million holidays a year just to cover the interest.
Other factors are the big shift in people arranging holidays themselves online and Brexit fears.
