The package tour pioneer said in July it was working to secure new investment from shareholder Fosun Tourism, which would see the Hong Kong group take control of the business, along with its lenders whose debt would be converted into equity.

The terms announced on Wednesday will see Fosun contribute £450 million (US$552 million) of new money in return for at least 75% of the tour operator business and 25% of the group’s airline.

Thomas Cook’s lending banks and noteholders will stump up a further £450 million and convert their existing debt to equity, giving them in total about 75% of the airline and up to 25% in the tour operator business, the group said.

The recapitalisation plan will result in a significant dilution in existing shareholders’ interests, the company said, but it had decided it was the best way to secure the future of the group for all its stakeholders.