Â© Reuters. FILE PHOTO: The TUI logo is seen at the TUI Travel Center following the coronavirus disease (COVID-19) outbreak, in Hanley, Stoke-on-Trent, Britain July 28, 2020. REUTERS / Carl Recine
LONDON (Reuters) – Travel company TUI Group has said it will raise â¬ 1.1 billion ($ 1.27 billion) in equity to help pay off its pandemic debt, as it has reported an increase in vacation bookings at the end of summer.
Germany-based TUI has taken out loans of over â¬ 4 billion and has been repeatedly bailed out by the German government after COVID-19 interrupted the holidays for much of last year and early of this year.
But this summer, travel to Europe is back, giving TUI the confidence to proceed with the capital increase on Wednesday, which it says would leave it in a better position to profit from the recovery.
Its main shareholder, the Mordashov family, planned to take over all subscription rights related to its 32% stake in the group for the 10 new fully subscribed shares for each offering of 21 existing shares.
“The capital increase will allow us to take one step closer to our goal of repaying government loans quickly,” TUI Managing Director Fritz Joussen said in a statement.
Summer bookings reached 5.2 million, TUI said, up from around 9 million in a typical summer, benefiting from a sharp increase in demand in August driven by customers in Germany and the Netherlands.
TUI said it expects an increase in travel this winter as restrictions have eased and it plans to operate 60% to 80% of its normal schedule. By summer 2022, he expected volumes to return to pre-pandemic levels, he added.
Following the capital increase, TUI’s cash and available facilities will amount to 4.5 billion euros compared to 3.4 billion euros on October 4.
($ 1 = â¬ 0.8636)
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