TUI Plans $1.8 Billion Fundraising Once Travel Demand Returns

(Bloomberg) — Holiday giant TUI AG could seek to raise about 1.5 billion euros ($1.8 billion) through a rights issue and asset sales once bookings recover and the company starts generating meaningful revenue again.

© Photographer: David Ryder/Getty Images North America
SEATTLE, WA – MAY 31: Boeing 737 MAX airplanes from TUI Airways sit parked in a parking lot at a Boeing facility adjacent to King County International Airport, known as Boeing Field, on May 31, 2019 in Seattle, Washington. Boeing 737 MAX airplanes have been grounded following two fatal crashes in which 346 passengers and crew were killed in October 2018 and March 2019. (Photo by David Ryder/Getty Images)

TUI will look at selling some of its 400 hotels and U.K. cruise arm Marella, Chief Executive Officer Fritz Joussen said in a briefing at the Frankfurt press club. A rights issue would also require a recovery in the share price, he said.

Debt at the Hanover-based travel firm has been inflated by a 3 billion-euro German government bailout after the coronavirus pandemic wiped out much of the summer vacation season. Joussen said TUI will also trim its aircraft fleet by as many as 30 planes.

Following what’s expected to be a “very volatile” winter for travel, future demand trends may become apparent between January and March, when most bookings for summer package holidays are typically made, the CEO said.

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Sales for 2021 so far mostly involve vouchers handed to customers for trips canceled this year, so that revenue will remain depressed even with relatively healthy occupancy levels. TUI is trimming capacity by about a fifth to bolster margins on new bookings.

The company sold its Hapag-Lloyd luxury and expedition cruise business in July and is looking at a similar option for Marella. It will also sound out investment fund interest in purchasing hotels, Joussen said.

The fleet will be cut to 120 planes, building on an agreement with Boeing Co. to defer delivery of aircraft worth 900 million euros.

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