TUI is raising new money from investors

The travel company TUI is raising new money from investors after being rescued by the state in the corona crisis. The company placed a convertible bond in the amount of 400 million euros with investors. Because of the high demand, the company took the option of increasing the volume, TUI announced in Hanover. The travel group had previously announced an issue volume of around 350 million euros. TUI announced that the convertible bond is intended to initiate the refinancing of loans from the corona stabilization packages. Even without placing the bond, the group had sufficient liquidity until the summer of 2021. As of the last published date (March 22), the liquidity was around 1.6 billion euros. The collapse in travel demand since the start of the corona pandemic a good year ago had put TUI in existential need in 2020. The state and private investors saved the group with financial injections. Before an additional capital increase of 500 million euros in January 2021, the support from three rescue packages with loans, guarantees, bonds and capital contributions already totaled 4.8 billion euros. In addition, the federal government can take over up to a quarter of the TUI shares. The recovery of the travel business in Europe is taking longer than expected, which is worsening the financial situation of companies in the industry. TUI CEO Fritz Joussen said the placement shows "that the capital market and investors trust the strategy and business model of TUI, actively support our path and follow it". The group has also set the course for a more digital, leaner and more efficient TUI. The transformation is ongoing. The convertible bond is only a very short-term solution for the liquidity problems of the highly indebted group, criticized analyst Becky Lane from the investment bank Jefferies. TUI stood out on the German stock market on Friday with a price drop of 2.18 percent.