One of the UK's best known travel brands, Thomas Cook, is being bailed out by Fosun Tourism Group with an injection of new money.
The deal moved closer to completion on August 28, when creditors of Thomas Cook Group Plc voted in favour of a 900 million pounds sterling financing package.
Fosun will own 75% of the tour operator and 25% of the airline, since European Union regulations stipulate that airlines are majority owned by European investors. In turn the creditors will own 25% of the tour operator and 75% of the airline.
There will not be much left for shareholders. Shares in Thomas Cook were trading at 150 pence in May 2018, but were down to just above 5 pence last week. Thomas Cook has said that it would like to remain a listed company, but there is a possibility that it will be de-listed.
Fosun International, controlled by billionaire Guo Guangchang, originally became a shareholder in Thomas Cook in 2015, and will now take control alongside creditors whose debt is being converted into equity. Fosun will contribute 450 million pounds sterling of new money.
Earlier this year, Thomas Cook said it was exploring a sale of its airline business, which consists of German carrier Condor and UK, Spanish and Scandinavian operations. But as its financial position deteriorated, management decided to look for a more radical solution.
Condor is one of the biggest leisure airlines in the German market, while Thomas Cook Airlines Scandinavia, with its headquarters in Denmark, is a major player in that region.
Fosun already owns holiday operator Club Med, which it acquired in 2015, and subsequently listed in 2018. Fosun International also owns English Premier League football team Wolverhampton Wanderers.
The recapitalised Thomas Cook will still face fierce competition from TUI AG in the German market, and faces a difficult trading environment as the busy summer season ends.
But the injection of fresh money from Fosun should reassure customers and travel agents making advance bookings.