Strong summer bookings prompt TUI to raise 1.1 billion euros in equity

German multinational travel and tourism firm, TUI Group, had been reported to have made plans to raise 1.1 Billion Euros ($1.27 billion) in equity to pay its debt due to the pandemic. This came to light with its report of holiday bookings increasing late summer.

It is public knowledge that the German government had bailed TUI out of its 4-billion Euro debt after COVID-19 had put the holidays on hold the year before and the first chapters of the present year.

This summer had seen the resurgence of travel in the European regions, imbuing in TUI an invigorated enthusiasm to go through with the equity raise on Wednesday. This move had been claimed by the travel company to benefit from economic recovery.

The Mordashov family, TUI’s largest shareholder, is planning to affirm all rights related to its 32% of shares from the group under the underwritten 10 new shares with every 21 shares offer.

Regarding the planned increase in capital, Fritz Joussen, TUI’s Chief Executive had this to say:

“The capital increase will enable us to take a significant step closer to our goal of rapidly repaying the government loans,”

Bookings for the summer had climbed to 5.2 million according to TUI which has yet to see better numbers as the typical summer sees 9 million which is owed to an influx of August customers from Germany and the Netherlands.

An uptick in travel in the coming winter is also expected according to TUI in light of easing restrictions. The projection had led them to speculate a 60% to 80% operations capacity. In the summer of 2022, volumes are expected to return to levels prior to the pandemic, the firm claims further.

With the capital increase, TUI’s cash and available facilities are projected to rise to 4.5 Billion Euros from the currently reported figures of 3.4 Billion Euros as of Oct. 4th.