WC and TCG cash levels following restructuring

All,

Please find an update to our analysis of Thomas Cook here.

Following our analysis of the split of the capital structure and the implied valuations underlying the proposed deal, we have taken a look at the current performance of the business and what the current WC level could mean for excess cash following the restructuring.

In short:

There will be little to no excess cash on the balance sheet following the restructuring despite the cancellation of the fully drawn RCF and the significantly lower negative WC position this summer.

Following our conclusion that at current levels the business itself is not an attractive one to own in what is going to be an unattractive structure as well, we conclude that any potentially large sum of cash is unlikely to remain idle on the balance sheet following the restructuring. Thus we also see no reason to own TCG for potential cash that may be tied up in its WC at present.
Wolfgang