Today, the German tourism company FTI filed for bankruptcy after unsuccessful negotiations with the federal government, reported the Athens-Macedonian News Agency (AMNA).
FTI’s bankruptcy impacts 11,000 employees and tens of thousands of travellers, many of whom are currently on vacation or have booked trips for the near future.
Employees were informed of the bankruptcy this morning via teleconference, though booking systems were already down due to supposed technical issues. Additionally, the website of the Labranda hotel chain, owned by FTI, was deactivated this morning.
According to the German newspaper BILD, FTI’s management spent the weekend negotiating with the Ministries of Economy and Finance, seeking to cover a funding gap amounting to tens of millions of euros to sustain operations through the summer. However, the federal government ultimately rejected the company’s request last night.
FTI, headquartered in Munich, had been struggling even before the coronavirus pandemic. It had survived with €595 million from the government’s Economic Stabilisation Fund (WSF) and an additional €280 million from UniCredit, guaranteed by the federal government and the state of Bavaria.
In April, it seemed possible to save the company as the American investment firm Centares announced plans to buy FTI, assuming its debt of one billion euros and providing an additional €125 million in new capital.
However, the process was delayed because the Federal Cartel Office would not approve the purchase until August or September, leaving FTI in need of interim funds to get through the summer.
FTI announced that efforts are being made to ensure that those already on vacation can complete their holidays and return without issues, while the Travel Insurance Fund will handle refunds for packages that will ultimately be cancelled.