FIXED: German travel giant TUI sells shares to reimburse virus rescue – Expat Guide to Germany
German tourism giant TUI, hit by the coronavirus pandemic, said on Wednesday it would raise more than € 1 billion by selling shares to existing shareholders to repay debt.
The world’s largest tour operator has focused on “refinancing and repaying government loans” now that the travel industry is picking up steam, TUI CEO Fritz Joussen said in a statement.
TUI suffered a record loss of 3.1 billion euros ($ 3.6 billion) in 2019-2020 as its business was curtailed by travel restrictions during the pandemic.
To weather the storm, the group received three bailouts from the German government, totaling 4.3 billion euros.
Subsequently, the group announced a major restructuring program in 2020, including the elimination of 8,000 jobs worldwide and the sale of 20% of its aircraft fleet.
As part of the € 1.1 billion capital increase, the group’s main shareholder, Unifirm Limited, has committed to purchase enough shares to retain its 32% stake in the company.
Existing shareholders will be offered 10 new shares for every 21 shares they hold, with all those not taken being sold by the underwriters of the sale through a placement, the company said.
The sale is fully underwritten by a syndicate of banks including Barclays, Bank of America, Citigroup and Deutsche Bank, he said.
TUI raised 500 million euros from shareholders and banks in December 2020, and now has 3.4 billion euros in cash, the group said.
“We want, we can and will return to the path of economic strength,” said CEO Joussen.
The group was supported by strong booking figures in 2021 as international travel reopens.
This summer, 2.6 million customers booked trips organized by the group, double the number who traveled with TUI between July and August of last year.
Reservations for the winter of 2021-2022 are already more than half of the equivalent figure for the pre-pandemic season of 2018-2019, according to the group.
wed / rl