TCG little news...

All,

Thoughts:

- Really the only news is a more precise announcement of the Equity split between Fosun and creditors across the two businesses. The impact is minimal, but it is positive to have confirmation of progress in the first place.

News:

- FOSUN to buy 75% of the Operator and 25% of the airline for £450m.

- RCF and Bondholders to target £450m in new money and converting into approx. 25% of the tour operator and 75% of the Airline.

Confirmations:

- Clearly this leaves little for current shareholders - unsurprisingly.

- Target time is Early October.

- Three Schemes of Arrangement to deal with the RCF, the 22s and the 23s. For the avoidance of doubt, the two notes are treated p.p. to each other and for now to the RCF. As per our previous mails, we think those will trigger CDS, although the question of deliverable remains.

- The company is to approach its shareholders for an agreement to the dilution, hoping to maintain its public listing, but alternative arrangements have been mapped out.

Caveats:

- The agreements are in principle, subject to a long list of further agreements and approvals form counterparts and non-binding thus far, but we trust that this basis is the best for all parties involved and will accept it as (it has already been) base case going forward.

Please find below TCG’s news release this morning.

Tomas is your analyst.

Wolfgang