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Tui AG on Tuesday unveiled plans for a capital raise in order to reduce the state aid it received during the pandemic.
The Anglo-German tour operator plans to issue up to 162.3 million shares, representing up to 10% of its share capital, as part of an international private placement. The number of new shares and the placement price will be determined on the basis of an accelerated bookbuild, which will start immediately.
The proceeds will be used to repay, in full, €671 million from the German government's Silent Participation II aid. In addition, it will reduce outstanding KfW credit lines by €336 million, to €2.1 billion. KfW is a German state-owned development bank.
‘We are implementing what we announced and committed to: the further repayment of the Corona aid, and we are doing so as fast as possible. Our goal is to return to normality quickly and focus on new growth. We are in stable waters, the market is intact, and we expect a strong summer of travel and a good fiscal year. For the current full year 2022, we therefore expect to return to significantly positive earnings,’ said Chief Executive Fritz Joussen.
‘With the transformation and realignment of the group, TUI is leaner, more digital and more efficient. This is the basis for continuing to steadily and swiftly reduce the Corona financial support and lower our debt and interest costs.’
The conditions of Tui's Covid aid from the German government included a suspension of dividends until it pays back the support. It last paid a dividend of €0.54 in respect of its 2019 financial year.
Shares in Tui closed up 3.0% at 246.00 pence in London on Tuesday.
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