Shareholders will be virtually wiped out in a £750 million rescue of ailing Thomas Cook Group (TCG) by Chinese investor Fosun, the tour operator admitted on Friday. Thomas Cook said it is in “advanced discussions” with Club Med owner Fosun, its largest shareholder with an 18% stake, and lenders on a “substantial” new capital investment which secures the future of the group. The £750 million injection would ensure 178-year-old Thomas Cook — saddled with a £1.6 billion debt pile — can cut debts, continue to trade over the difficult winter period and invest in the business. Fosun would get a majority stake in the firm’s tour arm and a minority holding in the airline. It said today it is a “committed” investor. But existing Thomas Cook shareholders will be “significantly diluted” as part of the shake-up.
Senior (SNR) has its results out next month and today brokers told investors to brace themselves for ugly figures. The firm usually flies quietly under the radar, but in recent months it has been caught up in Boeing’s 737 Max troubles. The US giant was forced to ground the 737s and cut back on production in March after two fatal crashes and still has not solved the software issue. Senior is heavily exposed to Boeing’s fortunes as the firm makes the wing ribs for the jets and also has a separate deal with Spirit AeroSystems, which makes the fuselage for the aircraft. In total its business with Boeing makes up 15% of group revenues, but this session analysts at Peel Hunt took a scythe to the numbers. Peel believes Senior’s results will show revenue from Boeing will have dropped to just $185 million (£148 million), versus the $215 million it previously pencilled in, and as a result it will serve up a profit warning.
Ocado Group (OCDO) was among the risers as debate over its valuation continues to rage in the City, with analysts at Bernstein defending the company’s astronomical valuation this session. Ocado’s revenues from its tech arm are minimal and don’t show in the company’s results. But analysts say they will come in eventually and investors shouldn’t be scared off. Bruno Monteyne at Bernstein is so confident that he has put a target price of 2500p on the stock, more than double its current level.
