Thomas Cook subsidiary Condor saved with €380 rescue loan

October 15, 2019

 

Condor Flugdienst GmbH (Condor) the German leisure airline and subsidiary of the now defunct Thomas Cook Group, has received approval from the European Commission for a loan from the German government of €380 million (US$418 million) to guarantee the smooth continuation of operations while it looks to shore up its future and battle against a liquidity shortage after the demise of its parent company.

The loan received approval as it is not seen as tantamount to distorting competition in the single market and will be used to write off major claims against other Thomas Cook Group companies which it will no longer be able to collect. According to Condor’s provisional administrator, Lucas Flöther: “Condor [now] has the necessary liquidity to bridge the winter season and continue business operations in full. The Condor management will now work out a restructuring plan in order to use the shielding procedure to align and set up Condor for a future without Thomas Cook. This plan is then to be adopted in the proceedings opened, which are expected to begin in December.”

Under the EU Commission’s guidelines in relation to rescuing an ailing business, aid can be granted for a maximum of six months, allowing sufficient time for an alternative source of funds to be found or, if Condor fails to repay the loan within the six-month period, it must show that a viable financial restructuring for the long-term benefit of the company exists and can be put to the Commission for assessment and approval. 

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