Thomas Cook has approached United Kingdom government for bailout funds - FT

The British firm includes tour planning operations and airlines

Sources added that Thomas Cook has "days rather than weeks" to secure the extra cash.

"The recapitalization is expected to result in existing shareholders' interests being significantly diluted, with significant risk of no recovery", it said.

A row between Thomas Cook and taxpayer-controlled Royal Bank of Scotland has escalated with both sides blaming each other for taking the travel agent to the verge of collapse.

"These discussions include a recent request for a seasonal standby facility of 200 million pounds, on top of the previously announced 900 million pounds injection of new capital".

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

A spokesman for RBS said the bank did not "recognize this characterization of events" and was working with all parties to "try and find a resolution to the funding and liquidity shortfall at Thomas Cook".

Thomas Cook Group, with about 1 billion pounds in revenue past year, included the famed operator of packaged tours as well as subsidiaries such as Thomas Cook Airlines and Thomas Cook Hotels & Resorts.

Insiders at Thomas Cook claim that RBS blindsided executives by demanding £1.1bn instead of £900m of cash to rescue the company during a meeting on Sep 9.

"Our proposed contribution of £450-million has not changed throughout this process", a spokesman for Fosun Tourism Group said.

Thomas Cook's lending banks and bondholders were to stump up a further £450-million under the plan and convert their existing debt to equity, giving them in total about 75 per cent of the airline and up to 25 per cent in the tour operator business, the group said.

It is feared the 178-year-old company - the world's oldest tour operator - could collapse by the weekend if the extra finance is not found.

ATOL (which stands for Air Travel Organiser's Licence) is a United Kingdom financial protection scheme and it protects most air package holidays sold by travel businesses that are based in the UK.

"We do not speculate on the financial situation of individual businesses", a spokesperson for Britain's Department for Transport said in a statement.

An urgent plea has been made to the Government to ensure tax-payer supported banks do not bring down Peterborough-based Thomas Cook.


"It is appalling that banks that owe their very existence to handouts from the British taxpayer show no allegiance to a great British company, Thomas Cook, when it needs help", said Brian Strutton, general secretary of the British Airline Pilots Association.



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