Thomas Cook Group

From Open Risk Manual

Thomas Cook Group Risk Event

Thomas Cook Group plc was a British global travel group. This entry collects and compiles public (open data) and freely accessible[1] data documenting the Risk Event (and other descriptive elements relevant from a Risk Management perspective). The entry also explores the potential of annotating risk events with semantic information.

There is no assurance whatsoever that this collection of information is complete, accurate or suitable for any purpose.'

Background Information

Brief History

The Group entity was formed on 19 June 2007 by the merger of Thomas Cook AG (itself the successor to Thomas Cook & Son) and MyTravel Group. The group operated in two separate segments: a tour operator and an airline. The group run hotels, resorts and airlines for 19m people a year in 16 countries. Thomas Cook was listed on both the London Stock Exchange and the Frankfurt Stock Exchange. Historical background on the Thomas Cook brand is provided at wikipedia:Thomas Cook Group

Business Data

Open Data

Other Data

  • Bloomberg: Data sourced through Bloomberg Info Page
    • Sector: Consumer Discretionary
    • Industry: Recreation Facilities & Svcs
    • Sub-industry: Leisure & Travel Services
    • Funded: 02/08/2007
    • URL: TCG
    • Phone: 44-17-3341-7100
    • Address: 6th Floor South Brettenham House London, WC2E 7EN United Kingdom
    • Employees: 21263
  • Moody's: Data sourced through Moody's
    • Ticker: TCG
    • Moody's Org ID: 822330780
    • LEI: 54930047DBKKLH3SF728
    • Market Segment: Corporates
    • Industry: LODGING
    • Peer Group: Business and Consumer Service
    • Domicile: UNITED KINGDOM


Financial Statements

Statements available at Thomas Cook Group Website

Subsidiaries

A list of subsidiaries as listed in Wikipedia

Statements of Control

Statement of control data (via Companies House UK / OpenCorporates) illustrate the intra group relationships within the entity (E.g., Share Ownership, Voting Rights, Right To Appoint And Remove Directors). Only the first layer of relations is shown in the table. The visual shows three layers of relations, with key nodes highlighted.

Click to enlarge

Date Description Mechanisms
2017-03-30 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK GROUP TOUR OPERATIONS LIMITED (United Kingdom, 30 Mar 2017- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2017-03-01 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK FINANCE 2 PLC (United Kingdom, 1 Mar 2017- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2017-03-01 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK GROUP AIRLINES LIMITED (United Kingdom, 1 Mar 2017- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2016-08-24 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK MONEY LIMITED (United Kingdom, 24 Aug 2016- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors, Significant Influence Or Control
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls SANDBROOK OVERSEAS INVESTMENTS LIMITED (United Kingdom, 10 Oct 2007- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK WEST HOLDINGS LIMITED (United Kingdom, 26 Sep 2014- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors, Significant Influence Or Control
2016-09-07 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls 1841 LIMITED (United Kingdom, 7 Sep 2016- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors, Significant Influence Or Control
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK IN DESTINATION MANAGEMENT LIMITED (United Kingdom, 7 Mar 2014- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK FINANCE LIMITED (United Kingdom, 23 Oct 2007- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK INVESTMENTS (2) LIMITED (United Kingdom, 23 Jan 2007- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors
2016-04-06 THOMAS COOK GROUP PLC (United Kingdom, 8 Feb 2007- ) controls THOMAS COOK GROUP MANAGEMENT SERVICES LIMITED (United Kingdom, 18 Jan 1999- ) Share Ownership, Voting Rights, Right To Appoint And Remove Directors

Credit Event

Legal Events

  • Chapter 15 bankruptcy protection in the United States. The company’s Chapter 15 petition was filed in the Southern District of New York, court papers dated Sept. 16 show. Law firm Latham & Watkins is representing the company, according to the documents. The case is Thomas Cook Group Plc, 19-12984, U.S. Bankruptcy Court for the Southern District of New York. (Bloomberg)
  • The Chapter 15 filing may also trigger the payout of default insurance on Thomas Cook debt.
  • The Thomas Cook Group ceased trading on 23 September 2019 and is being liquidated. Formal announcement: Compulsory Liquidation

Related Events

Insolvencies of related entities

  • Thomas Cook GmbH, filed for insolvency in Germany
  • Thomas Cook Austria, which belongs to the German unit, also filed for insolvency
  • Thomas Cook France declares insolvency
  • Neckermann Polska (Polish Subsidiary)
  • Destination Incoming, the Thomas Cook subsidiary in Palma

Reported News

Selected publicly accessible news items prior / around the credit event(s):

Historical Events

In 2011 the company came close to insolvency. It was saved by an emergency loan from a group of banks

Credit Rating History

Moody's

Data sourced through Moody's[2]

Date Action Description
23 Sep 2019 Rating Action Moody's withdraws Thomas Cook's ratings
30 Jul 2019 Credit Opinion Thomas Cook Group plc: Update following the rating downgrade to Ca
16 Jul 2019 Rating Action Moody's downgrades Thomas Cook's CFR to Ca; outlook negative
30 May 2019 Credit Opinion Thomas Cook Group plc: Update following the rating downgrade to Caa2
23 May 2019 Rating Action Moody's downgrades Thomas Cook's CFR to Caa2; outlook negative
15 May 2019 Announcement of Periodic Review Moody's announces completion of a periodic review of ratings of Thomas Cook Group plc
01 May 2019 Credit Opinion Thomas Cook Group plc: Update following the rating downgrade and its placement on review for further downgrade
26 Apr 2019 Rating Action Moody's downgrades Thomas Cook's ratings to B3; places ratings under review for downgrade
12 Mar 2019 Issuer In-Depth TUI and Thomas Cook: Peer comparison: TUI's credit quality to remain stronger thanks to more diverse business, stronger liquidity
08 Feb 2019 Issuer Comment Thomas Cook Group plc: Strategic review for Airline could be credit positive, but the outcome is currently uncertain
06 Dec 2018 Credit Opinion Thomas Cook Group plc: Update following rating downgrade with a negative outlook
04 Dec 2018 Rating Action Moody's downgrades Thomas Cook's ratings to B2; outlook negative
25 Sep 2018 Issuer Comment Thomas Cook Group plc: Profit warning is credit negative for Thomas Cook
15 Aug 2018 Credit Opinion Thomas Cook Group plc: Update to Credit Analysis
07 Dec 2017 Credit Opinion Thomas Cook Group plc: Update post FY2017 results publication
28 Nov 2017 Issuer Comment Thomas Cook Group plc: Solidly positioned in the B1 rating category despite mixed FY2017 results
06 Sep 2017 LGD Assessment LGD Assessment: Thomas Cook Group Plc
06 Mar 2017 Covenant Quality Assessment Thomas Cook Group plc: Covenant Quality Post-Sale Snapshot: €750m 6.25% Senior Notes due 2022
07 Dec 2016 Credit Opinion Thomas Cook Group plc: Update post FY2016 results publication
28 Nov 2016 Covenant Quality Assessment Thomas Cook Group plc: Covenant Quality Pre-Sale Snapshot: €300m _% Senior Notes due 2022
28 Nov 2016 Rating Action Moody's assigns B1 rating to Thomas Cook's new EUR300 million notes; affirms B1 corporate family rating with stable outlook
20 May 2016 Credit Opinion Thomas Cook Group plc: First Time Credit Opinion for Thomas Cook
18 May 2016 Rating Action Moody's assigns first-time B1 rating to Thomas Cook Group Plc; stable outlook

Fitch

Fitch Rating Actions can be accessed online at Fitch Reports and Analysis

Risk Factors

The following have been cited as risk factors that triggered the event

  • Excessive Debt (Leverage)
  • Poor Trading due to a number of structural or one-off reasons
    • holidaymakers becoming used to putting together their own holidays and not using travel agents
    • competition from low-cost carriers entering the package holiday market
    • customers delaying their summer holiday plans
  • Lack of Management Control

Direct Exposure

The direct impact of the credit event is transmitted through

  • Contractual Risks of counterparties (that are not members of the counterparty group but have direct contractual relationships with the affected entity and
  • Business Risk of counterparties that have a business association (without being members of the counterparty group) irrespective of any material contractual relationship with the affected entity

Contractual Risks

  • Employee Job Contracts
    • Circa 21,000 Employees
  • Employee Pension Fund: Four defined benefit pension schemes will enter an assessment period with the Pension Protection Fund. The UK schemes, which were closed to accrual in 2011, had a surplus of £278m in 2018, according to Thomas Cook annual report (FT Adviser). The company was making deficit repayment contributions to the Thomas Cook Pension Plan of £28m a year until 2020, which will now be stopped.
  • Shareholders: Shares have been delisted (100% Loss)
    • Institutional Investors
    • Insiders
    • General Public
  • Current Liabilities: Current Liabilities are the short term liabilities of the entity
    • Trade Credit extended by Hotels and other counterparties
  • Long Term Liabilities: Most significant long term liabilities (from Annual Report and Accounts 2018)
    • Retirement benefit obligations: £435 mln
    • Long-term borrowings: £1028 mln (See Bonds Outstanding)
    • Obligations under finance leases: £182 mln
    • Deferred tax liabilities: £88 mln
    • Long-term provisions: £282 mln
  • Bonds Outstanding
    • Thomas Cook Finance plc, €400,000,000, 6.75% Senior Notes due 2021 (Retired)
    • €750m 2022 Euro Bond, due June 2022 FT Report
    • Thomas Cook Finance 2 plc, has outstanding €400 million 3.875 per cent guaranteed notes due 2023. Borse Berlin. 29 Sep 2019 Price suggests Recovery Risk of 5.8%
  • Bank Loans: The Company had in place
    • a £875 million revolving credit facility and bonding and guarantee facility (the ‘Facilities Agreement’) and
    • £100 million of annual rolling bilateral funding from one of its insurance providers (the ‘Bilateral Agreement’)

Business Risks

Indirect Exposure

Indirect impact of the credit event is (in the first instance) the impact on counterparties that are once-removed in the network of contractual and business relationships of the affected entity:

  • Impact on Creditors of the Entity Creditors (Domino Effect or Contagion Risk), e.g. Liabilities of Hotel Companies and other operators
  • Impact on the Employees of Creditors, e.g. Redundancies in Hotel Companies or other operators

Loss Given Default Estimates

In terms of Loss Given Default, Bondholders are expected to write down £900m-£1bn, and lenders £550m-£825m as reported here

  • Landing Slots: Thomas Cook Airlines was operating in 10 UK airports: Manchester, Gatwick, Birmingham, Glasgow, Bristol, Newcastle, East Midlands, Stansted, Cardiff and Belfast International
  • Airplanes: Most of the airplanes are privately owned and leased out to the airline

References

  1. ↑ Some websites may only be freely accessible within a free article limit or similar scheme
  2. ↑ Limited information from the Moody's website is included here for reference purposes. All rights remain with Moody's

Semantic Annotation

The factbox displays any semantic data in the entry. Additionally those can be accessed via

  • a link to the RDF feed link showing in the factbox (Special:ExportRDF/Thomas Cook Group) that produces an RDF file
  • a page rendering of the semantic data (Special:Browse/:Thomas Cook Group)


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