The money would be enough for Thomas Cook to trade over the upcoming winter season and give it flexibility to invest in the business, the company said.
It also means that if Thomas Cook started paying dividends again in future, as unlikely as it may seem at this point, existing shareholders would get a lower proportionate share of any such dividend.
'We are committed investors, with a proven track record of turning around iconic brands including Club Med and Wolverhampton Wanderers FC, ' Fosun, which already owns an 18% stake in Thomas Cook, told Reuters.
The Shanghai-based Fosun Group conglomerate has been on a buying spree in recent years, and taking control of Thomas Cook would significantly expand its business in Europe.
'While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees, ' chief executive Peter Fankhauser said.
Its board has made a decision to move forward to recapitalize the business after evaluating a broad range of options to reduce debt, according to Thomas Cook's Chief Executive Peter Fankhauser.
Fankhauser said the sale of the airline business was paused while Thomas Cook focused on the refinancing, adding it was "too early to speculate on what will happen on the airline review".
The proposal, which is subject to due diligence and further talks, will see a significant amount of Thomas Cook's debt, which Refinitiv data shows stands at £1.8 billion, converted into equity, nearly wiping out existing shareholders.
The company is also weighing approaches for its airline business and Nordic operations.
Shares in Thomas Cook were trading down 46 per cent at 7.1 pence today, valuing its equity at £109 million (RM562 million).
Thomas Cook's stock has halved in value so far this year, with a current value of about United States dollars 255 million.
It is one of China's so-called "gray rhino" companies - along with Dalian Wanda Group Co (萬達集團), HNA Group Co (海航集團) and Anbang Insurance Group Co (安邦保險集團) - that have come under growing scrutiny in the past few years from Chinese authorities wanting to crack down on debt-fueled foreign acquisitions.
A spokesman for Fosun said: "Fosun is a shareholder in Thomas Cook, because it is a British company operating in the global travel industry, in which we have extensive experience".
The firm already owns almost a fifth of Thomas Cook, but if this deal goes ahead, it would gain a "significant majority" of the firm.
The troubled travel operator says it is in "advanced discussions" about a possible £750 million cash injection by Chinese investment firm Fosun.
- Widespread power outages hit parts of New York's Manhattan
- Huawei chairman upbeat about firm's sustainable development
- Irina Shayk's Bradley Cooper Post-Breakup Interview Is So Intriguing
- NY Jets' Chris Herndon Suspended 4 Games After DUI Crash Case Conviction
- A New Minecraft Earth
- Reckitt to pay $1.4 billion to end long-running Indivior probes
- Sudan activists call for ‘justice’ marches in wake of deal
- 'Star Trek' actress Stephanie Niznik dead at 52
- United Kingdom police launch investigation into leaked ambassador cables
- Jeffrey Epstein Accused Of Witness Tampering After Allegedly Wiring $350,000