A China-based tourism group looks set to take over the British travel firm Thomas Cook.

The company has agreed the terms of a rescue deal, which will see at least 75% of its tour operator division sold to Fosun Tourism Group.

Fosun will also get a 25% stake in its airline, in return for a stg£450m (€496m) cash injection.

Thomas Cook said implementation of the proposal will involve "a significant new capital investment and reorganisation" of the group.

The plan is set to come into force in early October.

In an announcement in July, Thomas Cook said that shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun.

It said its board continues to proceed "on the basis that a recapitalisation, achieved with the support of shareholders, is the preferred means of securing the future of the group".

A Thomas Cook flight is seen at Dublin Airport in 2012 | Image: Mark Stedman/RollingNews.ie

However, it added that the recapitalisation is expected to result in existing shareholders' interests being "significantly diluted", subject to feedback from creditors and the new money providers.

The firm has struggled with intense competition in popular destinations, high debt levels and an unusually hot summer in 2018 which reduced bookings.

Thomas Cook closed its Irish operations back in 2014, announcing it was to end chartered flights out of Ireland.

At the time, the firm said the move was part of a strategic review - which moved their business for the Irish market online.

Thomas Cook Group has some 21,000 employees and 200 own-brand hotels.

It operates from 16 source markets and serves over 22 million customers a year.

Its shares are listed on the London Stock Exchange.

Fosun was founded in 1992 and is listed on the Hong Kong Stock Exchange since 2007.

It already owns one of the world's largest leisure holiday chains, Club Med, and the Israeli Dead Sea mineral skincare brand Ahava.