Tui AG on Friday said it has launched a €1.8 billion capital raise to repay German state aid it received at the start of the Covid pandemic.
The Hanover, Germany-based holiday operator said it will offer 328.9 million new shares at a subscription rate of 8 new shares for each 3 existing shares. The subscription price of €5.55 per new share represents a discount to the theoretical ex-rights price of around 40%, it noted.
TUI shares were down 6.8% to €14.80 each in Frankfurt on Friday morning. They were down 8.1% at 1,299.50 pence in London.
The company said it plans to repay outstanding €420.0 million of state aid, convertible Silent Participation I, and €58.7 million 2020/2026 bonds with warrants, including accrued interest at a total market value of around €750 million.
Tui explained that, with remaining net proceeds of around €568 million, the current drawings under a €1.45 billion cash facility will be reduced to about €870 million. Further, it intends to reduce the €2.1 billion credit line under a KfW facility to €1.1 billion. KfW is a German-state owned investment and development bank.
Looking ahead, Tui noted that the ‘encouraging booking momentum’ it reported with its first-quarter results in February was continuing.
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