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TUI Launches About EUR 1.1 Bln Capital Increase

Tour operator TUI AG (TUIFF.PK) said that it will launch a fully underwritten capital increase with subscription rights to raise gross proceeds of about 1.1 billion euros.

The company will offer 523.52 million new ordinary registered shares with no par value of the company at a subscription ratio of 10:21--10 New Shares for every 21 existing shares. The Subscription Price of 2.15 euros per New Share represents a discount to theoretical ex-rights price of 35.1%.

TUI said its largest shareholder, Unifirm Limited, with a 32.0% holding in the company, has undertaken to exercise all Subscription Rights attributable to its shareholding at the Subsription Price and to subscribe directly for New Shares represented by such Subscription Rights.

The company noted that it plans to use the net proceeds of the offering to reduce interest costs and net debt by reducing current drawings.

As a result, taking into account the expected net proceeds of the Offering of around 1.1 billon euros, the current drawings under the KfW Facility would be reduced by 375.0 million euros to zero and the current drawings under the Cash Facility would be reduced by the remaining net proceeds of 724.5 million euros to 762.0 million euros.

The company noted that existing shareholders, other than Unifirm, can exercise their subscription rights to the new shares during the subscription period from and including 8 October 2021 up to and including 26 October 2021 through their respective depositary bank.

Unifirm has undertaken not to dispose, sell or transfer any of its existing shares or any of its Subscription Rights or any New Shares acquired pursuant to the Unifirm Commitment until the final settlement of the Offering or 16 November 2021, whichever is the latest.

Meanwhile, TUI, in its post-close trading update, said that overall Summer 21 programme totaled 5.2 million bookings, an increase of about 1.1 million bookings since its August update.

More than 2.6 million customers departed for their TUI holidays during July and August, doubling the 1.3 million customers who travelled in July and August last year.

For peak summer period to date (July to October), the company has so far operated a capacity of 42% for July and 48% for August. In contrast to Continental European markets, UK departures have remained largely subdued since last update, with a nearly unchanged traffic light system limiting the return of popular destinations such as Turkey, Egypt and the Dominican Republic.

The company now expect to operate a capacity for peak summer period of between 50% and 60%. Peak summer period bookings are currently 49% of 2019 levels with ASP up 2% (overall Summer 2021 bookings are down 63% with ASP up 5% versus Summer 19).

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