TUI in €1.1bn capital raise as summer bookings pick up

Travel company TUI said it planned to raise €1.1bn (£940m) through a fully-underwritten capital increase to help pay down massive debts incurred during the Covid pandemic, as it reported a rebound in holiday bookings.

TUI said on Wednesday that The company on Wednesday said it has seen a bounce in summer holiday bookings, led by Germany and Netherlands. UK sales had picked up since the government eased Covid travel curbs last month.

Investors will be offered 523.5m new shares on a 10-for-21 basis priced at €2.15 each - a discount to Tuesday’s closing price of 326p. The group’s largest shareholder, the Mordashov family with 32%, planned to take up it its full entitlement.

"The capital increase will enable us to take a significant step closer to our goal of rapidly repaying the government loans," said TUI chief executive Fritz Joussen.

TUI has borrowed more than €4bn and received government support as the pandemic battered the travel industry over the last 18 months.

The money raised would go towards paying back all drawings under its loan facility with German state-owned development bank KfW and part of a separate cash facility.

Summer bookings rose by 1.1m to 5.2m since an update in August and the company said it had operated at 42% of capacity for July and 48% for August.

TUI said it expected a pickup in travel this winter due to an easing of restrictions and planned to operate 60% - 80% of its normal programme. Summer 2022 volumes were expected to return to pre-pandemic levels.