TUI – the world’s largest holiday company and tour operator – is to raise €1.8bn, by way of a share offering, in a bid to lower its debt mountain and repay the State aid it received in Germany to cope with the Covid crisis.
The money will be raised via a rights issue, which sees new shares offered to existing stakeholders at a discounted price to its current share price.
The discounted price element of the plan has already hit TUI shares.
The plan will see TUI repay €420m to Germany’s Economic Stabilisation Fund, the WSF; pay out nearly €59m in bond repayments and reduce its current credit line with Germany’s State-owned investment and development bank KfW from €2.1bn to €1.1bn.
TUI said the money raise will improve its credit status, reduce its debt mountain by €1bn and allow it to concentrate on growth and recovery.