| Date | Subject |
|---|
24/9/2019
09:01 | steptoes yard: I'm afraid the signs were there, see my post of 19 May below, all publicly available information.
Steptoes Yard - 19 May 2019 - 09:19:44 - 9055 of 20925 Thomas Cook - Fankhauser's Flyers - TCG
Been predicting this outcome for months, see my posts. If anything the end has come along quicker than I expected. But that's the problem with the velocity of money once things go bad, that's it, the co is in the deep end of the pool. Those lining up to buy the airline don't have to pay a premium anymore, they may even get a discount.
Just like a bank with customers queueing to get their deposits out this in turn puts people off booking. I said a year ago when they made 46m profit, on 23m customers that's 2 quid a head! Nine billion of turnover. What happens when that falls just 5%?
If bond prices have been sliding, what possesses people to get excited about the equity?
For those comparing to the 2011 turnaround, well they recruited Harriet Green to head up the turnaround. She was barely three quarters into the recovery when the Bullingdon Club style blazers decided she was more of a threat than a strength. Massive red flag.
Constantly blaming the weather, Brexit. Sure but this applies to all participants in the sector, TUI, OTB etc. Next they'll be blaming having 500 shops when consumers prefer to be online. I'm reminded of the blazers at the English Cricket Board after the disastrous 2015 World Cup when they said "we didn't know the game had moved on and the effect if 20 20 batting on the 50 over game...". ITS YOUR JOB TO FIND OUT.
Sorry but shocking leadership. When you get an accomplished person as CEO try to hold on to them, don't fire them because you feel threatened. Use them.
500 shops! I mean come on! Think about it as a shareholder. If they had put out an RNS 3 years ago saying we are fundamentally shaking up our business following a detailed evaluation and over the next 18 months we are closing 90% of our shops, would peeps have come on here and gone "the board are mad, we need shops!"
Blaming the capital markets. You take money from the capital markets, you return money to the capital markets. Companies who have free cash flow return money to shareholders. Some take money from shareholders. It all depends how they are positioned. When things get dire, yes hedge funds circle, insolvency practitioners are consulted, bond holders and banks trade up and down in the bonds. But TC have a CEO who gets a tad shaken when quizzed on the share price and dismisses it as some "scheme in the city" rather than seeing it as a "reflection of his leadership and vision since November 2014". Because that's how long it has been.
That's why they are paid huge remuneration packages to act in their capacity on the leadership table. I don't doubt that Mr Frankhauser knows lots about the travel business. But i do doubt he knows sufficient about the velocity of money and how capital markets work. He was probably a good Head of Division. But not a CEO. If you want to borrow from the capital markets then at least have a steer as to what the obligations are. Bonds need to be repaid.
Business continuity horizon scanning. So many threats but they affect TUI, OTB as well. Declining high street presence, terrorism, fuel pricing, airline ownership, capital projects like own brand hotels, change in consumer habits, heatwaves, political change, these things aren't new. TC survived Occupied Europe in the 1940s so it should be able to plan for things like this. Even if they don't manifest.
This is leadership like the people who ran the Brit car industry in the 70s constantly flapping around to find an excuse as to why their competitors are bending the rules.
I hope there is something for shareholders but the indications are not so.
|
23/9/2019
08:15 | loglorry1: If anyone has a decent number of TCG share to sell, held with a decent broker, please contact me as I would pay a very low price for them (not much). I'm short and will be paid in full at zero but sometimes it is quicker to just pay a small sum rather than wait.
|
02/8/2019
07:58 | deanmatlazin: I think that billionaire will up his stake to 20-30% share of TCG and then will loan his money to TCG to sort it's finance out. TCG share gone up back to £2/share. His got more than 10 times value of his share price + also the loan back from TCG.
Shrewd!!!
|
18/7/2019
07:25 | castleford tiger: Current situation.
Trading at TCG continues to get worse and bigger losses are going to happen against a small trading profit last year.
Last winter they said they managed liquidity but needed 300m for this year so that tells me they are still loss making.
We are all guessing the outcome ( learning as we go) and the power struggle between banks and bond holders and FOSUM goes on.
FOSUM are very likely to de list if they get the travel company. So holders I don't know what happens to any shares. Maybe it gets listed in Hong kong ?
Banks and bond holders are going to have to take a haircut on this one at some point.
Current share price should probably be about 1p but like FLYBE I am surprised.
Holders I guess think sod it lets stay in and see what happens.
The statements from the company have been questionable and read both ways.
If you believe they are ok. If like me you think its doomed its a plaster on a broken leg.
We the PI `s get turned over time and time again. Always the last in the line.
Look at Conviviality and patisserie Valerie.
The first one discovered a huge HMRC debt and went in under a week. The second another fraud.
Auditors are failing us.
Today its TCG /Tomorrow its one of mine or yours
Tiger
|
14/7/2019
09:18 | pwhite73: oakville - "I will never understand why there are still punters buying when they are worthless?"
Punters are still buying because the recapitalisation proposal involves Fosun, the banks and bondholders taking equity stakes in TCG Plc. Equity stakes are shares. The share price of TCG has fallen so low that a 95% dilution is equivalent to today's share price.
Idiots on LSE Chat have worked it out like this. If the share price is currently worth 5.38p and existing shareholders end up with only 5% of the company then you reduce 5.38p buy 95% and you're left with only 0.27p, therefore that's where the shares are heading.
It's complete rubbish because it ignores the fact that existing shareholders only end up with 5% of the company after Fosun have pumped in £750m and the bondholders/lenders perhaps a similar amount.
Thomas Cook then becomes a new company with no or easily manageable debt so all that money they have been paying to the creditors becomes profit they can invest back into the company to modernise and streamline it for the 21st century.
In short if everything works out those that are buying at today's crash prices will hope to ride on the coat tails of the recapitalisation and see a return on their investment in TCG PLC pretty quickly.
|
13/7/2019
14:00 | trading62: I was being generous when I stated 1p :-)
PWhite73:
"The recapitalisation will clear almost all the debt and leave the company in a position to move forward".
Hmm....maybe my maths is failing me, but £750m is not almost all of the debt of £1.5m.
"Only thing I'm not sure of is if Fosun will be paying a separate amount for it on top of the recapitalisation"
You can bet your bottom dollar that they won't be paying any more, why would they?
"The company is not going bust and CFO said the dilution will leave the existing shareholders owning "a very small portion of the company""
Correct, they not be going bust if this 'rescue' deal goes through, but shareholders will get 0p to 1p back. Happens all the time with companies, rinse and repeat cycle.
"If the recapitalisation goes ahead (which I doubt) and given the size of a debt free TCG that small portion could well be today's market cap of £78m or higher".
If the recapitalisation does not go ahead, where is the knight in shining armour coming from? TCG will be bust for sure. Your choice very soon will be to recover a maximum of 1p or zero per share.
I admire your blind faith in this company given the current circumstances, albeit it's misguided IMHO.
Why are details of the deal being drip fed, with little or no meat on the bones? Because it will result in obliteration of share price to 1p or less once fully revealed. Shareholders were given plenty of opportunity to get out from 9p yesterday, but too many chose to stay so they can lose it all. Take your losses, swallow your pride, stop throwing more money away and move on and invest elsewhere. The TCG party is well and truly over now.
|
13/7/2019
09:17 | pwhite73: philmac56
Dilution is not the problem for retail shareholders its the share price that counts. For example you own 100% of a company where there are 100 shares at £1.00 per share. Somebody injects £900 into your company at £1.00 per share. So there are now 1000 shares in your company and you have been diluted by 90% but the value of your 10% holding remains the same at £100. The dilution there is not a problem.
This is where TCG retail shareholders are. Its what the markets think the recapitalisation will do for the value of their shares not the level of dilution. If Fosun are taking a significant controlling stake in TCG then what happens to their shares ultimately will happen to yours. So Fosun can't be taking a significant controlling stake in TCG and then planning to hand the stake over to the creditors via administration. Furthermore the RNS said this:-
"The recapitalisation proposal is subject to certain conditions including performance conditions, due diligence, further discussions and reaching agreement with a range of company stakeholders (including the pension trustees, bondholders, other financial creditors and Fosun's shareholder approval), and receipt of any regulatory and anti-trust clearances or approvals."
"Performance Conditions"!! If performance conditions is a criteria then I don't believe the recapitalisation is going to happen any time soon that's why there's no details yet. As I said earlier I think Fosun want to own the global brand name TCG outright. They're making funds available to protect their 18% stake in the guise of a capital injection.
Lets see what pans out but this is certainly not a DEB or Flybe.
|
13/7/2019
08:19 | pwhite73: 4dag many were burnt by DEB so can't see the difference between the two companies.
DEB went into administration because they required working capital but the price they had to pay was to hand over the company to its creditors. Mike Ashley of Sports Direct was a 29% shareholder. But in order to refinance the company he wanted to be installed as CEO and was only prepared to lend DEB an initial interest free loan of £150m. DEB needed a lot more money than that something like £800m over time. The creditors put up an initial £240m which DEB drew on immediately. There was no proposal of a D4E swap from the creditors as Ashley the 29% major shareholder would have never agreed to it.
TCG also has a major 18% shareholder in Fosun. Their rescue package does not include installing themselves as the new board. They are stumping up £750m cash (not a loan) in exchange for share equity over time not in one go. There is no intention whatsoever to hand the business over to its creditors or place it into administration. They want the Thomas Cook global brand name for themselves and intend to make it one of China's premier tour operators. One in five global tourists are from China.
The recapitalisation will result in a significant dilution for existing shareholders but dilution has nothing to do with the share price. The RNS states a significant part of the debt will be converted to shares so not all of it. Nowhere in the RNS statement do you get the usual 'there will be little equity value if any for existing shareholders".
Once the word 'Recapitalisation' appears its a siren call for all the 1p doom merchants and a green light for the stock to be shorted to high heaven. TCG has no control over what price the markets place on their shares but what we do know for a fact is that Fosun want to own the majority of them. I suspect Fosun would have bought TCG outright but for the EU restrictions in place over foreign companies owning EU airlines and the embarrassment of the board having seen to be sold out to the Chinese. £750m and £1.5 billion debt is loose change to Fosun. The Chairman alone is worth £8 billion and the company is worth about £80 billion.
So in answer to your question I believe the stock will recover once TCG restructures, streamlines and they are implementing this now.
|
30/6/2019
16:55 | craftyale: Why I'd shun the Thomas Cook share price and buy this FTSE 100 stock insteadRoland Head | Sunday, 30th June, 2019 | More on: CCL TCGRoad sign warning of a risk ahead Image source: Getty Images.Since hitting an all-time low of 8p in May, the Thomas Cook Group (LSE: TCG) share price has risen and was trading at about 14p, at the time of writing. Is it time to start taking a fresh look at this historic firm?Unfortunately, I don't think so. I'll explain what I think will happen next, and why I'm still avoiding TCG stock.This can't continueThomas Cook has suffered from poor trading this year. But the real problem is simply that the company has too much debt. Even though it has received £2bn in advance payments from customers, borrowings have still risen as trading has slowed.Over the 12 months to 31 March, Thomas Cook paid £122m in interest costs but only generated £30m of cash from operations. The firm's latest balance sheet shows total liabilities of £6,371m and total assets of just £5,026m. This suggests that the firm may be insolvent. Without a refinancing deal, I don't see how Thomas Cook can continue trading.Two possible solutionsOne solution might be for the company to raise cash by selling new shares. But the shares have fallen so far that this isn't a viable option. The only realistic choice I can see is for the firm to do a deal with its lenders.One option would be for the company to swap some of its debt for new shares. This would give lenders majority ownership - probably more than 95%, in my experience. The value of existing shares would fall to almost zero.However, what seems more likely at the moment is that assets will be sold, raising cash to repay debt. According to recent statements, Thomas Cook is in discussions with various parties about selling its airline, its Northern Europe business and its entire tour operator business.If these sales go ahead, the current listed company will be an empty shell, worth nothing. I'd expect the shares to go to zero.Just don't do itHere at the Motley Fool, we have a responsibility to take a balanced view of potential investments.But even with my balanced hat on, all I can say is that I believe buying Thomas Cook shares is a reckless gamble. I would sell this stock today.
|
21/5/2019
11:15 | jaknife: rmart, re your 9479 and 9480,
"On Sunday, Thomas Cook said: "We have the support of our lending banks and major shareholders, and just this week we agreed additional funding for our coming winter cash low period."
Have a read of TCG's's interim accounts again from just five days ago:
Https://www.investegate.co.uk/thomas-cook-group--tcg-/rns/results-for-the-six-months-ended-31-march-2019/201905160700052322Z/
In particular, you should note that TCG state:
"As part of the discussions with lenders, we received a waiver in respect of the March 2019 covenant tests."
In plain and simple terms, TCG have already breached their bank covenants. The banks are "supportive" because they are following "the London Approach" in order to maximise returns for creditors. Shareholders are toast.
And:
"those who have panicked and sold have once again been ripped off by shorters. Shorts will close now and the share price will rise IMO."
IG have confirmed this am that there is no more borrow available. In two weeks this has gone from 6% stock borrowed to the maximum possible stock borrowed. Shorters will not close until this goes to zero. In the meantime there may be fluctuations but the willingness of bondholders to bail out as low as 40% of par and for banks to bail out at 59% of par is all that you need to know to indicate where the share price is going.
JakNife
|
PLUS1
