Leisure travel specialist Thomas Cook Group is seeking an additional £150 million ($180 million) capital injection for liquidity through the winter low season, as talks on a previously announced £750 million recapitalization continue.

Thomas Cook Group said July 12 it was in advanced discussions with its largest shareholder—Chinese company Fosun Tourism Group—and its banks for a £750 million debt-to-equity swap and new financing facilities to get it through the winter season and provide “financial flexibility” for future investments.

In an Aug. 12 stock market update, Thomas Cook said it has made significant progress with Fosun, its banks and noteholders on the key transaction terms.

“The discussions with noteholders include the injection of additional capital on top of the previously announced £750 million,” Thomas Cook said. “This additional capital, of approximately £150 million, will provide further liquidity headroom through the coming 2019/20 winter cash-low period and ensure the business can continue to invest in its strategy.”

Fosun is slated to take a significant controlling stake in Thomas Cook’s tour-operating business and a significant minority interest in the group’s airline division.

Under the proposed deal, £650 million in external bank debt and €1.15 billion ($1.3 billion) in bond debt would be converted into equity, substantially deleveraging the group.

Repeating its caution from July 12, Thomas Cook Group said existing shareholders will be significantly diluted as part of the recapitalization.

“The group expects to implement the recapitalization in early October 2019,” Thomas Cook said.

A strategic review of Thomas Cook’s airline unit—which is made up of Condor, Thomas Cook Airlines Balearics, Thomas Cook Airlines Scandinavia and Thomas Cook Airlines UK—was as paused when the Forsun deal was announced in July. Combined, the carriers operate a fleet of around 100 aircraft, posting revenue of £3.5 billion and a £129 million operating profit in 2018.

Thomas Cook is a huge leisure-travel group, generating £9.6 billion in annual sales, with a headcount of 21,000 employees. However, the European operating market has become progressively more challenging, impacting the group’s finances.

Victoria Moores victoria.moores@informa.com