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Holiday giant TUI receives financial emergency package of € 1,8 billion

NEWS RELEASE – 09 December 2020: Holiday giant TUI has reached agreement with various partners on a further financial emergency package of €1,8 billion.

Also read: The impact of the coronavirus on the safari industry

Extra investments as a precaution

The deal includes Germany's Economic Support Fund (WSF), KfW Entwicklungsbank (KfW), commercial banks and Unifirm, the company's largest shareholder. TUI said it is taking further precautions in view of the rising number of infections since the autumn, strict travel restrictions in many countries and resulting shorter booking times for customers.

The emergency financial package for TUI should ensure that the company can bridge the gap if the pandemic continues into 2021.

Following initial reports of vaccine success, TUI added that it expects the pandemic situation to improve during the first half of 2021, leading to a greater return of leisure travel.

TUI plane lands at Schiphol, Amsterdam
TUI plane lands at Schiphol, Amsterdam

TUI was a very healthy company

Fritz Joussen, CEO of TUI, explains: “Before the Covid-19 pandemic, TUI was a very healthy company.

“The market is intact; the question is there.

“But we haven't been able to generate any significant income since March.

“Our integrated business model allows us to react very flexibly to short-term changes in the pandemic situation, just as we successfully ramped up our travel program for several weeks after the first wave in July.

“People want to travel; tourism remains a growth sector and an important sector for stabilizing the southern eurozone. †

The emergency kit for TUI

The emergency package consists of silent participations from the WSF, an additional credit line from the KfW, guarantees and a capital increase with subscription rights, to be decided at an extraordinary general meeting of TUI in January.

The Mordashov family, owners of Unifirm, have made a strategic long-term investment in TUI and have agreed to participate in the capital increase with their company.

Joussen adds: “The financial package provides the certainty to consistently look ahead and to prepare the group strategically and structurally for the time after the pandemic.

“With these measures, the group ensures liquidity for an ongoing pandemic in 2021, while at the same time improving our long-term balance sheet structures.

“The total package of different financing from different partners shows the broad confidence of all parties involved in the future of tourism and the TUI Group”.

Including the additional agreed financial emergency package, TUI AG now has financial resources and credit facilities of €2,5 billion.

Earlier this year, TUI Group secured a further €3 billion in financing in two separate tranches from the German government.

Source: breakingtravelnews.com
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