TUI needs even more money

First the taxpayer shot billions, now fresh money is to come from the financial market: TUI remains deep in the crisis. The share price reacts promptly.

TUI poster in the shop window of a travel agency in Hanover

Dhe ongoing travel restrictions in the Corona crisis are putting the travel group TUI under increasing pressure. After its rescue, the company wants to get even more money from investors with, among other things, government aid worth billions of euros. As TUI announced on Friday in Hanover, the travel group wants to place a convertible bond with investors in the amount of around 350 million euros. There should be the option of an increase to 400 million euros, it said in the message.

The news was badly received on the stock exchange: the TUI share price dropped by more than 7 percent during the day. The collapse in travel demand in the corona pandemic had put the group in dire straits last year. The state and private investors saved the group with financial injections. Before an additional capital increase of 500 million euros in January 2021, the support from three rescue packages with loans, guarantees, bonds and capital contributions already totaled 4.8 billion euros. In return, the federal government may take over up to a quarter of the TUI shares.

According to TUI, the board of directors and the supervisory board want to use the convertible bond to increase the Group’s liquidity because the corona crisis continues with international travel restrictions. TUI intends to use the proceeds “to further improve the liquidity position” in the ongoing crisis and then to repay other liabilities. When asked, a spokesman emphasized that the financing for the coming months was secured. The fresh money should also be used to replace existing loans, among other things.

TUI

— (–)
  • 1T
  • 1W
  • 3M
  • 1J
  • 3J
  • 5J

To the detailed view

For the travel company, an early end to travel restrictions is vital. Just a few weeks ago, TUI CEO Friedrich Joussen was confident about the event at the Annual General Meeting and said, “If some easing is already in place in April and – perhaps more importantly – credibly for the summer, then we will do one this year see good summer business in tourism ”. TUI then expects up to 2 billion euros to flow into the company in liquid funds.

The convertible bond is to run until April 16, 2028 and can be converted into new shares in the TUI Group at a premium of between 25 and 30 percent. The interest should be between 4.5 and 5 percent.