Tour Operator TUI Explores Ways to Repay State Aid

(Bloomberg) -- TUI AG is exploring ways to raise fresh capital to help the German travel firm pay back state bailouts, people with knowledge of the matter said.

The company is working with advisers to consider options including a potential share sale, according to the people, who asked not to be named because the information is private. It is discussing raising about 1 billion euros ($1.2 billion) through a capital increase, though the final size could change, the people said.

TUI is likely to wait at least a few weeks before deciding whether to proceed with any fundraising, the people said. It may wait until after the summer holiday season to assess how much it needs, according to the people.

Shares of Hanover, Germany-based TUI fell as much as 3.9% in London, where it has its main listing, after Bloomberg reported on the plans.

The world’s largest tour operator has raised billions of euros from three bailouts since the coronavirus pandemic slammed its business ferrying mainly British and German tourists to warm-weather destinations. TUI, which operates airlines, hotels and cruise ships, has called on the German government and private investors to pitch in on prior fundraisings.

With travel making a tentative restart, European airlines including Deutsche Lufthansa AG are starting to raise capital to restore their balance sheets.

Deliberations are ongoing, and details of the potential fundraising could change, the people said. A representative for TUI declined to comment.

TUI shares were off 2% to 390 pence as of 10:25 a.m. in London, trimming the company’s market value to 4.28 billion euros.

The company has canceled trips from the U.K. in recent weeks as the government puts the brakes on plans to ease border restrictions. It has also sold resort interests in Spain and Italy to raise cash.

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