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02 Dec, 2020 15:25

TUI AG clinches 1.8bn euro support package including from German state

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Travel operator TUI AG has clinched a financial support package with a group of investors that included the German government worth €1.8bn.

The package consists of a capital increase of €500m, alongside a silent participation by Germany's Economic Support Fund of €700m.

Of the latter, €420m will be convertible into the company's shares.

In a statement, TUI said the package would bolster its liquidity in the current "volatile" market environment and see it through the "presumed" travel restrictions until the start of the 2021 summer season.

Berlin will also provide a state guarantee for €400m or, alternatively, boost the non-convertible portion of the ESF's silent participation.

A further €200m will be provided by state lender KfW via a credit facility, while the existing credit facility will be extended through July 2022.

KfW had already extended a €2.85bn credit line and an ESF warrant bond of €150m with option rights for roughly 58.7m shares.

Should the ESF ever convert its silent stake it would obtain not more than a 25% plus one share participation in TUI's equity capital.

As of 1522 GMT, shares of TUI AG were off by 1.02% at 506.2p.

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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.