The Hannover based tour operator TUI Group said it has fulfilled another condition for the provision of a second stabilisation package by the German federal government that provides it with liquidity to survive over the forthcoming winter.
“Following the approval by the holders of the Senior Notes to waive certain bond conditions at the beginning of September, the German Economic Stabilisation Fund (Wirtschaftsstabilisierungsfonds, WSF) has now subscribed to the Group's warrant bond with a volume of 150 million euros as planned. Both conditions had to be fulfilled by 30 September 2020,” the company said in a statement.
TUI has a 50% stake in TUI Cruises, including Hapag-lloyd Kreutzfahrten, in Germany and owns in full Marella Cruises in the UK. It has a major network of travel shops in many countries and it is a major retailer of cruises of other lines as well.
With the proceeds from the bond with warrants and the increase in the KfW credit line of €1.05 billion, TUI Group will have a further 1.2 billion euros at its disposal. Including this second stabilisation package, TUI will then have financial resources of around €2.0 billion. The package ensures sufficient liquidity to cover the seasonal fluctuations over winter 2020-21 and also strengthens the Group's position in the current volatile market environment.
Fritz Joussen, CEO of the TUI Group: "We continue to operate in a very volatile market environment. Travel advice and travel disruptions in our markets and destinations are constantly changing. There are still significant restrictions on worldwide travel through COVID-19 and on our business.”
“This makes planning more difficult and requires enormous flexibility from tour operators. The increased stabilisation package with government loans will above all secure liquidity during the pandemic. We have to bridge this period without any significant turnover and at the same time accelerate the restructuring for the post-COVID-19 period.”
“TUI will become more digital and efficient. In addition, we want to continue to set standards for more sustainability in tourism in the future, even if the current focus has to be on overcoming the crisis," Joussen said.
In March 2020, TUI received the commitment for an initial stabilisation package. The KfW tranche of 1.8 billion euros was used to top up TUI's existing bank revolving credit facility ("RCF"). Two conditions were met for the second stabilisation package: the existing creditors of the bond due in October 2021 waived a possible future limit on financial indebtedness. In addition, TUI is issuing a bond with warrants, which will be subscribed exclusively by the WSF.