SHANGHAI -- British travel company Thomas Cook Group has entered liquidation after its creditors balked at a rescue plan from Chinese conglomerate Fosun International.
The venerable tour operator's collapse has stranded more than 150,000 travelers overseas, prompting the British government to launch a huge repatriation effort.
"We extend our deepest sympathy to all those affected by this outcome," Fosun said in a statement. "Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalization with other affiliates, core lending banks, senior noteholders and additional involved parties."
Fosun's rescue plan would have seen the company, via Hong Kong-listed subsidiary Fosun Tourism Group, inject 450 million pounds ($561.6 million) into Thomas Cook in exchange for a controlling stake in its tour business and a minority interest in its airline operations. Under the plan, debtholders would also inject more funds into Thomas Cook while seeing their claims converted into equity.
The two Fosun companies already held a combined stake of 18.1% in Thomas Cook Group, making the conglomerate the British company's largest shareholder.
"Thomas Cook Group continued to engage with a range of key stakeholders over the weekend in order to secure final terms on the recapitalization and reorganization of the company," the British company said in a statement.
"Despite considerable efforts, those discussions have not resulted in agreement between the company's stakeholders and proposed new money providers," it continued. "The company's board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect."
Shares of Fosun Tourism were trading 4.7% lower at HK$10.06 midafternoon in Hong Kong while Fosun International shares were down 0.8% at HK$10.38.
Fosun, which also owns the Club Med resort chain and Canadian circus company Cirque du Soleil and has a kids' club joint venture with toy company Mattel, first bought into Thomas Cook in 2015. The two have a joint venture travel agency in China.
While Beijing has forced a number of other acquisitive private Chinese conglomerates including HNA Group and Anbang Insurance to turn from buying foreign companies to selling off assets, Fosun has remained an active purchaser in sectors ranging from finance to pharmaceuticals. It recently bought into Tickled Media, a Singaporean online parenting information platform.