European travel giant TUI Group plans to raise about € 1.5bn ($ 1.8bn) through additional share issues and asset dives once demand in key markets begins to recover and the company’s financial performance improves, Bloomberg reported.
The debt burden on the company increased significantly after the allocation of three large loans in the amount of over 4 billion euros, which were also allocated under the guarantees of the German government. The last tranche of 1.2 billion was agreed on September 30.
The company is considering selling some of its 400 hotels, as well as the Marella cruise line, as an option for cash, said CEO of the tour operator Fritz Jussen at a press briefing in Frankfurt am Main. As for the issue of rights (an additional issue of shares distributed among the existing shareholders at a reduced price), then for this step, according to Yussen, it is necessary to restore the share price.
In addition, the company has previously announced plans to ditch part of its air fleet. It is planned to sell up to 30 aircraft of various classes, reducing the total fleet to 120 aircraft. The travel giant also signed an agreement with Boeing to postpone deliveries of new aircraft, which saved about 900 million euros more.
Fritz Jussen noted that after a “very volatile” winter, travel demand could begin to recover from January to March, when most summer travel bookings are usually made.
As for bookings for 2021 at the present time, it is still a transfer of travel that could not take place due to the pandemic this year. Thus, the cash flow will remain at a low level even with a sufficiently high volume execution. At the moment, the tourparator has reduced the planned volumes by about 20% in order to increase the overall marginality.
Let us remind you that this is not the first step of the company to reduce its own low-income assets. In July, the TUI Group had to sell the cruise line Hapag-Lloyd to a newly formed joint venture with Royal Caribbean Corp. According to Yussen, the deal will also help determine the interest of investment funds in buying hotels.
The Group currently owns about 400 hotels of such brands as TUI Blue, Robinson, Magıc Lıfe, RIU, Sensatorı, Sueno, Atlantica, Gunpowder, Blue Diamond, Dorfhotel, Grouphotel, Iberotel, Jaz, Mixing, Nordotel, Sol Y Mar, Tuscany Resort, Castelfalfi, TT Hotels.
Only important. For the pros only.