TUI to raise 1.1 billion euros in equity after summer bookings boost

October 6, 2021

LONDON (Reuters) -Travel company TUI Group said it would raise 1.1 billion euros ($1.27 billion) in equity to help pay down its pandemic debt, as it reported a jump in holiday bookings in late summer.

Germany-based TUI has taken on loans of over 4 billion euros and been bailed out multiple times by the German government after COVID-19 stopped holidays for much of last year and the beginning of this year.

But this summer, travel within Europe has returned, giving TUI the confidence to proceed with the equity raise on Wednesday, which it said would leave it better placed to take advantage of the recovery.

Its largest shareholder, the Mordashov family, planned to undertake all subscription rights linked to its 32% holding in the group under the fully underwritten 10 new shares for every 21 existing shares offer.

“The capital increase will enable us to take a significant step closer to our goal of rapidly repaying the government loans,” TUI’s chief executive Fritz Joussen said in a statement.

Summer bookings had risen to 5.2 million, TUI said, compared to about 9 million in a typical summer, benefiting from a surge in demand in August driven by customers from Germany and the Netherlands.

TUI said it expected an uptick in travel this winter given restrictions had eased and it was planning to operate 60% to 80% of its normal programme. By summer 2022 it expected volumes to have returned to pre-pandemic levels, it added.

Following the capital increase, TUI’s cash and available facilities will rise to 4.5 billion euros from 3.4 billion euros on Oct. 4.

($1 = 0.8636 euros)

(Reporting by Sarah Young, Editing by Paul Sandle)

Source Link TUI to raise 1.1 billion euros in equity after summer bookings boost