The Nordic business of collapsed British travel company Thomas Cook has been saved following an agreement to purchase the business was made by Norwegian property tycoon Petter Stordalen and private equity firms Altor and TDR Capital.
Since Thomas Cook’s liquidation in September, the search for a buyer had been ongoing for the profitable Thomas Cook Northern Europe, also known as the Ving Group. It gas said earlier this week that it had received a number of attractive bids for the business.
A financial reconstruction package for the business had been agreed to by the buyers, they said in a joint statement. The plan includes providing an investment of about 6 billion Swedish crowns in liquid funds and guarantees for the business.
A 40 per cent stake in the business will be taken by Stordalen’s Strawberry Group and Altor each while the remaining 20 per cent stake in the company would be taken by TDR Capital.
“Competition was rock hard to get in here, but we were the only group to work on a reconstruction that would secure one solution for all,” billionaire investor Stordalen said in a presentation for media and Ving Group staff on Wednesday, drawing cheers from the employees.
Nordic travel agencies Ving, Globetrotter, Spies, Tjareborg, carrier Thomas Cook Airlines Scandinavia and a number of hotel brands is owned by the Ving Group which has an employee strength of about 2,300 people.
“It has been a very complex deal and has happened very fast,” Ving Group CEO Magnus Wikner told media and staff. “For us it was incredibly important to find an owner that has the strategic competence and financial strength to become a good, long-term owner for us.”
Thomas Cook was the oldest travel agency in the world and it ran into serious trouble – and ultimately went bankrupt, after it could not service its debts. Despite several attempts the company, the lending banks refused to support any rescue plan for the company even as the business of the company was being hit by changing customer habits and increased severe competition to business because of low-cost airlines and online-only rivals.
The collapse of the business resulted in more than 100,000 travelers stranded in various parts of the world and many of its subsidiaries had started to look for ways and means to find a rescue deal.
Last year, an operating profit of 1.4 billion crowns was made by Ving Group. “Ving has always been a solid company,” Stordalen said. “The truth is, Ving did everything right. Thomas Cook did everything wrong”.
(Adapted from BusinessTimes.com)