The world's biggest holiday company, TUI Group, is considering all options including disposals and a capital raise to pay down new debt taken on to help it survive the COVID-19 pandemic which pushed it to a €3 billion annual loss.
Days after the Hannover, Germany-based company secured a third bailout from the German government to stabilise its finances, its chief executive said that it is looking at all levers to repair its balance sheet.
"It might be also M&A, it might be...new investment structures for our assets...or it might be also another capital increase...we cannot exclude any of these," CEO Fritz Joussen told reporters.
Shares in TUI have lost 55% of their value in the year to date, giving the company a market capitalisation of £2.6 billion.
TUI will need to start repaying some of its COVID-19 related debts in 2022, said Joussen, adding that he is focussing on trying to reduce approximately €2.2 billion of the pandemic-related debt.
Cost savings of €400 million annually, up from a previous €300 million target, will initially help. He also said that TUI will sell its UK-based Marella cruise line but continue to operate it and offload some of its 400 hotels which are regarded as non-core.
For the 12 months ended that on September 30, TUI posted a loss of €3 billion, from €894 million of underlying core earnings (EBIT) last year, after customer numbers slumped from pre-COVID levels of approximately 23 million annually to two million last summer.
Vaccine And Bookings For Next Year
Positive news about a COVID-19 vaccine and bookings for next year has given TUI confidence that demand for holidays will return and reach pre-pandemic levels in 2022.
Joussen said that TUI has no plans to ban customers who have not had the COVID-19 vaccine and that testing will remain key over the coming year, with TUI already carrying out antigen tests on most passengers.