One of the UK’s leading travel retailers, Thomas Cook, has fallen into debt crisis. This has led to fears that business debt could eventually translate into personal debt for those involved.
When businesses experience financial difficulty, such as a fall in share price, this could affect the staff. A period of redundancy could ultimately lead to personal debt.
Trading issues have affected the company badly. This has promoted a widespread review of the business and raised awareness over the need for cutbacks.
The travel industry has been hit hard by the economic downturn and Thomas Cook’s UK arm has been severely affected.
Shares have fallen by 80% in the last year and low profit predictions have only served to put off investors.
The company did not ask shareholders for a rights issue to raise cash. However, the company is in talks with a number of banks as it strives to improve its ‘financial’ flexibility.
Speaking to the Evening Standard, Finance Director Paul Hollingworth said; “The group delivered steady results for July and August, in line with our expectations, but September has been a more challenging month.”
Manny Fontenia-Nova, the Thomas Cook Chief Executive who was paid £15 million over the last four years, left the company suddenly in August.
The latest unemployment figures from the Office for National Statistics revealed that over 150,000 redundancies were made in the three months up to August.
Increasing levels of redundancy, combined with the high cost of living, could leave many in debt.
Seek debt help
Debt problems are widespread and with many now out of work, a number of people could be in arrears with their mortgage, rent, bills and other financial products.
Debt Advice Group could help manage debt problems with specialist advice over a wide range of solutions. Individual circumstances vary drastically, therefore the specialist advice could be tailored to meet your needs.
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