Tui announces €1.8bn capital raise

By Michele Maatouk

Date: Friday 24 Mar 2023

(Sharecast News) - Tui shares tumbled on Friday after the travel firm announced a €1.8bn fund raising to help cut debt and interest costs and to repay state aid.
The company will offer just over 328.9m new ordinary shares at a subscription ratio of 8:3 and a price of €5.55 per new share. This represents a discount to the theoretical ex-rights price of around 40%.

Tui said "the capital increase and significant return of government funding allows for a considerable improvement in TUI's credit metrics and reduces ongoing interest costs, allowing the group to focus on growth and further market recovery".

The company plans to use the net proceeds of the offering of around €1.75bn to reduce interest costs and debt. It will repay €420m in state aid and the outstanding €58.7m 2020/2026 bonds with warrants, including all warrants, issued to the German Economic Stabilization fund (WSF) and including accrued interest at a total market value of around €750m will be repaid in full.

Tui said the group's net debt of €3.4bn would have been reduced by around €1bn. This would cut net interest payments over an equivalent 12-month period by approximately €80m to €9m.

At 0855 GMT, the shares were down 6.8% at 1,317.05p.


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