SHARES in Thomas Cook dropped by 15 per cent after the holidays firm agreed a rescue deal that should secure its future.

Britain’s oldest travel company saw its shares plunge to 6p, against 150p in May 2018, as the package tour pioneer announced it had agreed the key terms to a deal with Chinese firm Fosun, lenders and bondholders.

It is now to sell the majority of its tour operator business and a stake in its airline business to Chinese conglomerate Fosun, as part of the deal.

The Chinese firm will contribute £450 million of new money to the UK travel firm and acquire 75% of the company’s tour operator business and 25% of its airline business.

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Group lenders and bondholders will pay around £450m also, for approximately 75% of the equity of the airline and up to 25% of new equity for the tour operator arm.

Thomas Cook confirmed that although shareholders will retain an investment in the company as part of the deal, shareholdings in the reorganised company will be “significantly diluted”.

The holiday firm said the deal is still subject to a number of conditions, including performance, due diligence and credit approvals.

It said that customers and trade creditors will not be affected by the restructuring deal.

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The deal comes after Thomas Cook said last month that Fosun signalled that it was in talks to provide the £450m contribution as part of a £750m cash injection alongside lenders and bondholders in a bid to secure the future of the company.

It said that Fosun would help to recapitalise the company, with the help of the lending banks.

Thomas Cook said it stated in July “that shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun and converting senior creditors on terms to be agreed”.

The company added: “The board continues to proceed on the basis that a recapitalisation, achieved with the support of shareholders, is the preferred means of securing the future of the group for all its stakeholders, while at the same time enabling the existing shareholders to continue to retain an investment in the company.”

Thomas Cook said the proposed recapitalisation remains subject to credit approvals, investment approvals, agreement on group performance conditions and due diligence.

Despite the move, it said it currently plans to maintain its listing on the London Stock Exchange.

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It said: “The current intention of the board is to maintain the company’s listing.

“However, the implementation of the proposed recapitalisation may, in certain circumstances, result in the cancellation of the company’s listing.”

Russ Mould, AJ Bell investment director, said shareholders may have to accept that their investment could be worthless.

He said: “Investors are simply trying to cash out and crystallise any value left in their investment before the refinancing, for fear there could be nothing left if they wait.”

Thomas Cook has suffered recently as a result of mounting debts, reporting a £1.2 billion net debt in its half-year results in May.

It has also been hit hard by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.

Thomas Cook put its airlines business up for sale in February after profit warnings in 2018 put it in the position of potentially seeking funding.

Founded in Market Harborough in 1841 to run temperance day trips, the company has annual sales of £9.6bn, 19 million customers a year and 22,000 staff operating in 16 countries.

Fosun is currently Thomas Cook’s largest shareholder, and it also owns the Club Med holiday business and Wolverhampton Wanderers Football Club.

A spokesman for Fosun said earlier: “We are committed investors, with a proven track record of turning around iconic brands including ClubMed.”

Manuel Cortes, of the trade union the TSSA, said: “This appears to be good news for our members as Thomas Cook’s presence on our high street looks to have been saved.

“Of course, our main concern is ensuring that our members’ jobs and their terms and conditions are protected. We are therefore seeking an urgent meeting with Thomas Cook to gain the assurances our members need.”