TUI Group ponders seeking more capital after state aid

TUI Group said it continued “evaluating various measures” to further strengthen its balance sheet just days after the German state-owned COVID-rescue fund WSF (Wirtschaftsstabilisierungsfonds) completed the subscription of warrant bonds worth EUR150 million euros (USD176 million). “Among the measures currently being considered, is also a short to mid-term capital increase, with a volume – if implemented – which would be significantly lower than the EUR1-1.5 billion (USD1.2-1.8 billion) mentioned in the press,” the leisure holding said in an investor update. TUI Group underlined that the decision to seek more capital had not been made yet. It has also not decided on when it could potentially do so and how much would it seek. Chief Executive Fritz Joussen underlined that while the public support was crucial to cover the immediate losses suffered by TUI Group due to the pandemic, the holding was separately evaluating its way forward and its capital needs in the post-COVID era. The WSF subscribed to the warrant bonds on September 30, 2020, after holders of TUI’s senior notes had agreed to waive certain bond conditions. Including a EUR1.05 billion (USD1.23 billion) credit line from the German state development bank KfW, the group said it now had around EUR2 billion (USD2.4 billion) in available capital. “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,” Joussen said.