TUI AG, the German tour operator that has a significant foothold in the cruise industry particularly in Germany and the UK, said that it would strengthen its balance sheet through a fully underwritten €1.1 billion equity  issue.

Subscriptions right would be offered to investors who can buy 21 new shares in the company for each 10 ones they currently hold at a subscription price of €2.15 per share.

"TUI’s largest shareholder, Unifirm Limited, with a 32.0% holding in the company, has undertaken to exercise all Subscription Rights attributable to its shareholding at the Subscription Price and to subscribe directly for New Shares represented by such Subscription Rights,” TUI said in a statement.

The remainder of the capital increase is secured through an underwriting by a banking syndicate, subject to terms and conditions in line with market practice for similar transactions.

“The Company intends to use the net proceeds of the Offering to reduce interest costs and net debt by reducing current drawings (i) first under the KfW Facility, under which as at 4 October 2021 the Company had drawn €375.0 million, and (ii) second under the Cash Facility, under which as at 4 October 2021 the Company had drawn €1,486.5 million,” the company said.