LONDON MARKET OPEN: Thomas Cook Sinks As It Requests Cash Injection

(Alliance News) - Stock prices in London opened higher on Monday, starting the week on the front foot following US-China trade angst last week, while Thomas Cook fell sharply after saying it was in talks for a further dilutive capital injection. The FTSE 100 was up 43.64 points, or 0.6% at 7,297.49. The FTSE 250 was up 113.63 points, or 0.6%, at 19,205.78. The AIM All-Share was up 2.27 points, or 0.3%, at 888.25.The Cboe UK 100 index was up 0.8% at 12,371.61. The Cboe UK 250 was up 0.3% at 17,0.32.89, while the Cboe UK Small Companies was down 0.1% at 10,921.12.In European equities, the CAC 40 in Paris was up 1.1% and the DAX 30 in Frankfurt up 1.0%. In the FTSE 100, London Stock Exchange Group was the best performer at the open, up 0.5% at 6,948.00 pence after JPMorgan hiked its price target on the stock to 7,700p from 5,850p and kept its Overweight rating. At the other end of the large-cap index, Mexican gold miner Fresnillo was among a handful of stocks in the red, down 1.6%, tracking spot gold prices lower.The precious metal was quoted at USD1,492.34 an ounce Monday, down from USD1.500.67 late Friday. Gold rose above the USD1,500 mark for the first time in six years last week amid heightened US-China trade tensions. In the FTSE 250, Tullow Oil was the standout performer, up 15% after the oil and gas company announced an oil discovery by the Jethro-1 well, drilled in the Orinduik licence, offshore Guyana.The well encountered 55 metres of net oil pay, after the well was drilled to a total depth of 4,400 metres in 1,350 metres of water.Evaluation of logging data has confirmed that Jethro-1 is the first oil discovery on the licence, comprising high-quality oil bearing sandstone reservoirs, dating from the Lower Tertiary age, Tullow said.The discovery has de-risked all other tertiary age prospects on the licence, particularly the Upper Tertiary Joe prospect, which will start drilling later in August, the company said. Looking further ahead, Tullow said the non-operated Carapa well on the adjacent Kanuku licence is expected to be drilled later in 2019, in order to test the Cretaceous oil play.Hammerson was up 2.5% after RBC Capital raised the shopping centre operator to Outperform from Sector Perform.At the other end of the midcap index, UDG Healthcare was down 2.0% after RBC cut the healthcare services provider to Sector Perform from Outperform. On the London Main Market, Thomas Cook was down 25% after the troubled travel operator said it made substantial progress on its proposed recapitalisation with shareholder Fosun Tourism Group and several noteholders, though its proposal for new funding will leave shareholders "significantly diluted".Last month, Thomas Cook said it was in talks with Chinese shareholder Fosun, already the firm's largest shareholder with 18%, for a GBP750 million cash injection.On Monday, Thomas Cook said its discussions with noteholders included the injection of an additional GBP150 million, on top of the previously announced GBP750 million. The company said the extra capital would provide "further liquidity headroom" through the 2019-20 winter period - a low cash time for holiday operators - and ensure the company can continue to invest.Thomas Cook said it will implement the recapitalisation in early October, and this will require a reorganisation of the ownership of its Tour Operator and Airline businesses. This means a significant amount of the company's external bank debt of GBP650 million and EUR1.15 billion bond debt would be converted into equity, resulting in a "substantial deleveraging of the group".Thomas Cook, therefore, expects existing shareholders to be "significantly diluted" as part of the recapitalisation.The company's market value currently stands at around GBP114 million. In China, the Shanghai Composite closed up 1.5%, while the Hang Seng index in Hong Kong was down 0.1%. Markets in Tokyo are closed for the Mountain Day holiday.The pound was quoted at USD1.2047 Monday, lower than USD1.2081 late Friday.Sterling was trading around levels not seen since the start of 2017, amid fears the UK will leave the EU without a divorce deal.