Holiday group TUI has unveiled a capital increase to pay back elements of a German state bailout that it had received during the peak of the Covid-19 pandemic.
The company will issue up to 162,291,441 new shares, which, based on Tuesday's closing price of 2.89 euros apiece, would result in proceeds of up to €469 million.
TUI said it planned to use the proceeds as well as existing cash resources to fully repay the second installment of a so-called silent participation of the German government in the order of €671 million.
TUI also said it would reduce outstanding credit lines by state lender KfW by €336 million to 2.1 billion.
"As a result, in addition to the KfW credit line, the remaining government financing ... for TUI will be the approximately €59 million bonds with warrants convertible into shares and the Silent Participation I, also convertible into shares, of €420 million," TUI said.
Germany-based TUI has taken on loans of over €4 billion and been bailed out multiple times by the German government after Covid-19 stopped holidays for much of 2020 and the beginning of 2021.
