TUI announces share sale to pay back German state bailout

·1 min read
FILE PHOTO: A Boeing 787 of the travel company TUI taxis close to the northern runway at Gatwick Airport in Crawley

FRANKFURT (Reuters) - Holiday group TUI on Tuesday unveiled a capital increase to pay back elements of a German state bailout that it had received during the peak of the COVID-19 pandemic.

The company will issue up to 162,291,441 new shares, which, based on Tuesday's closing price of 2.89 euros apiece, would result in proceeds of up to 469 million euros ($494 million).

TUI said it planned to use the proceeds as well as existing cash resources to fully repay the second installment of a so-called silent participation of the German government in the order of 671 million euros.

TUI also said it would reduce outstanding credit lines by state lender KfW by 336 million euros to 2.1 billion.

"As a result, in addition to the KfW credit line, the remaining government financing ... for TUI will be the approximately 59 million euro bonds with warrants convertible into shares and the Silent Participation I, also convertible into shares, of 420 million euros," TUI said.

Germany-based TUI has taken on loans of over 4 billion euros and been bailed out multiple times by the German government after COVID-19 stopped holidays for much of 2020 and the beginning of 2021.

($1 = 0.9495 euros)

(Reporting by Christoph Steitz; Editing by Riham Alkousaa)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting