TUI Reportedly Planning Capital Increase
Travel firm TUI is planning a share sale to raise up to €1 billion as it looks to ride out the travel slump that has been caused by the coronavirus pandemic, people close to the matter have said.
No decisions have been taken and a number of options are still on the table, the people said, adding that a possible equity injection by a German government rescue fund is being discussed.
Russian billionaire Alexey Mordashov, who owns 25% of the London-listed firm, is expected to invest pro-rata in any rights issue, which could be decided in the coming weeks, the sources said.
TUI and the German finance ministry declined to comment, while Mordashov was not immediately available for comment.
TUI had said in August that it was considering raising new equity from shareholders or selling off parts of the business to reduce debt taken on to survive the coronavirus pandemic.
Among other possibilities, TUI is considering options for its cruise ships, planes and hotels as it seeks to raise cash, the sources said.
Losses And Government Bailout
The company, which took 23 million people on holiday last year, lost €1.1 billion during the three months through June after COVID-19 halted travel, wiping out revenue and straining its balance sheet as it burned through approximately €550 million to €650 million per month.
It secured a government bailout of €3 billion in debt.