Tui seeks extra €1.8 billion to finish paying off Covid state aid
James ChappleTui is seeking to raise a further nearly €2 billion to finish paying off the remaining state aid it was afforded by the German government during the pandemic.
The European travel giant’s supervisory board has approved a €1.8 billion capital increase, Tui confirmed on Friday (24 March), which will be open for new share purchases until 17 April.
Sebastian Ebel, Tui Group chief executive, confirmed the net proceeds from the capital increase would also be used to reduce interest costs and debt, "creating a solid basis for the future".
"We are doing everything we can to further improve the group’s profitability," said Ebel. "Our goal is clear: we want to grow profitably again and gain more market share with additional customers and new products."
Ebel added the "encouraging booking momentum" highlighted during its first-quarter results announcement last month had continued into the spring.
Tui will use the cash to pay back around €750 million to Germany’s economic stabilisation fund, as well as around €440 million drawn down over the winter from a credit line provided by Germany’s state bank KfW.
The group has also pledged to "significantly reduce" is KfW credit line. Should the capital increase be successful, Tui expects to cut its net debt from €3.4 billion at the end of its 2022 financial year to €2.4 billion.
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