Scottish Widows Funds Watch Thomas Cook Plummet

HSBC and Scottish Widows' total £17 million holding in the beleaguered travel operator will be worth closer to £4 million after today's collapse

Holly Cook 22 November, 2011 | 7:00PM

Scottish Widows UK equity funds collectively held some £12 million-worth of shares in Thomas Cook Group (TCG) as at end-September, according to Morningstar fund holdings data, which is now likely to be worth as little as £3 million after the beleaguered travel operator announced money trouble this morning. At end-September, HSBC Asset Management also had four funds invested in Thomas Cook at end-September that together owned 12.8 million shares, worth over £5 million at yesterday’s closing price but more like £1.25 million today.

The Sun Refuses to Shine on Thomas Cook
Shares in Thomas Cook tumbled 75% on Tuesday, valuing the holiday firm at just over £89.25 million by close of play versus around £360 million just 24 hours prior. Management announced it is renegotiating its banking facilities and delaying the release of full-year results due to deteriorating trading conditions.

The company said it was currently in compliance with its banking covenants but was seeking to improve its "resilience". Group Chief Financial Officer Paul Hollingworth, who himself holds over 150,000 shares according to Morningstar equity data, said the company was seeking to negotiate additional short-term facilities to the value of approximately £100 million, on top of around another £100 million in additional finance announced in October. Its net debt stood at £900 million at end-September.

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About Author

Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk

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