TUI is to raise a further €1.8 billion by selling shares at a discount to existing investors.

However, major shareholder Alexey Mordashov, has been barred from taking part in the rights issue.

The Russian oligarch’s 30.9% shareholding is subject to a loss of rights as a result of sanctions under German securities law, due to Russia’s invasion of Ukraine.

TUI AG said in a statement to the London Stock Exchange: “The majority shareholder sanctions persons or entities can therefore not participate in the rights issue and no subscription rights will be granted to them.”

The travel giant is issuing 328,910,448 new ordinary shares, which can be bought by other existing shareholders at a discount of almost 40%, to raise €1.8bn.

The money raised will be used to repay some of its existing debt and reduce interest costs.

In the statement, TUI said: “Today’s announced capital increase and significant return of government funding allows for a considerable improvement in TUI’s credit metrics and reduces ongoing interest costs, allowing the Group to focus on growth and further market recovery.”