TUI announces share sale to pay back COVID loans

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By Linsey McNeill
14/12/2022
Home » TUI announces share sale to pay back COVID loans

TUI has announced it is to increase its capital to raise the money it needs to pay back COVID loans.

It will issue up to 162.3m new shares, which should raise up to €469m.

TUI said it will use the proceeds from the share sale, as well as existing cash resources, to fully repay the second tranche of a €671m loan from the German Government.

The travel giant will also reduce outstanding credit lines by state-backed lender KfW by €336m to €2.1bn.

In total, TUI has borrowed €4bn since the outbreak of the COVID pandemic, which it began to repay in spring of 2022 when trading started to return to normal.

In a trading update this morning, new CEO Sebastian Ebel said TUI has ‘surmounted the existential crisis’.

He added: “Of course, we still have homework to do as a consequence of the pandemic, further cutting our debt, refinancing, strengthening the balance sheet.

“But our operational focus is set clearly on returning to profitable growth.

“We are gradually pruning back the state engagement – the agreement with the ESF and the planned capital increase to follow the AGM are the next logical steps back to normality and complete financial independence.

“The pandemic confronted the whole sector with the crisis of a century and without those government bail-out packages TUI would hardly have survived.

“We are grateful for that support. However, if you look at how much we actually drew down from those packages, you can see that we have come through the crisis in robust shape.”

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