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TUI AG will raise 1.1 billion euros $1.3 billion by selling new stock, making it the latest travel company to tap investors for cash to reduce a giant debt pile.
The share sale, with a discount price of 2.15 euros each in a rights offering, will allow the world s biggest tour operator to reduce its draw on a state-backed rescue loan to zero, TUI said Wednesday in a statement.
TUI is the latest travel giant to raise money from investors as border restrictions ease. Deutsche Lufthansa AG said it would raise 2.14 billion euros in a rights issue to help pay down a 9 billion-euro government bailout package. EasyJet Plc announced an 1.2billion raise in capital last month.
Bloomberg reported in June that the firm was exploring ways to raise about 1 billion euros of fresh capital to help German travel firm pay back state bailouts.
TUI has raised billions of euros from three bailouts since the pandemic hammered its core business, which is taking mainly British and German tourists to warm-weather destinations. The company operates airlines, hotels and cruise ships. It has relied on the German government to pitch in on prior fund raisings.
A return to positive cash flow this past summer gives management some breathing as it plots an exit from the crisis, provided the recovery doesn t falter yet again.
The company also said Wednesday it anticipates a wider return to international travel this winter season with capacity significantly better than last year. Still, it expects to operate only at 60% to 80% normal levels.
The fully underwritten rights offering, at a 35% discount, will reduce TUI debt from 8.7 Billion euros to 6.5 billion euros, the company said. Top shareholder Unifirm Ltd. will exercise rights for its entire 32% stake. The offering will run from Oct. 8 - Nov. 2 in New York City, and will run through Nov. 2 - Oct. 8.
Unifirm is controlled by the family of Russian billionaire Alexey Mordashov.
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