TUI secures further €1.2bn in government support

TUI secures further €1.2bn in government support

TUI Group has taken steps toward securing a further €1.2 billion bailout from the Germany government.

With bondholders having waived certain rights at the start of the month September, the German Economic Stabilisation Fund (WSF) has now subscribed to a warrant bond with a volume of €150 million.

Both conditions had to be fulfilled by September 30th to unlock further federal support.

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 at its disposal.

Including this second stabilisation package, TUI will have financial resources of around €2 billion the company said it a statement.

Fritz Joussen, chief executive of the TUI Group, explained: “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.”

He added: “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 had previously warned that with the choice of destinations largely dependent on government policy on the coronavirus, the trading backdrop was likely to remain volatile “for the next few quarters”.

The company said it was cutting 8,000 jobs as part of a €300 million cost-saving programme.

In March, TUI received a commitment for an initial stabilisation package from the German federal government valued at €1.8 billion.

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