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Holiday company TUI boosted by extra $1.4 bln aid…

BERLIN/LONDON, Aug 12 – Holiday company TUI said the German government agreed a 1.2 billion euro ($1.4 billion) aid package to help boost its finances and ensure it survives into 2021 as the pandemic continues to wreak havoc on the travel industry.

The company said the extra liquidity will help it endure the coming winter season and beyond.

With the new loans, which add to state-backed loans TUI has already received, the company will have cash and available facilities of 2.4 billion euros, it said in a statement on Wednesday.

The pandemic halted TUI’s activities for around three months to June. It had been hoping for a recovery from July but new restrictions brought in by Britain on travel to Spain have meant more holiday cancellations and a further dent to its finances.

TUI, the world’s largest tourism group, warned in May that it needed to cut 8,000 jobs and shed 30% of its costs to prepare for a smaller tourism market.

Detailing the aid package, TUI said state-owned lender KfW agreed to increase an existing credit line by 1.05 billion euros in a deal which is subject to the issuance of a convertible bond of 150 million euros to the Economic Stablisation Fund (WSF), and a waiver by bondholders of notes due next year.

It is the second time Germany has stepped in to help TUI, after KfW provided the company with a 1.8 billion euro loan in April. TUI said the additional tranche will be structured as an increase to TUI’s existing revolving credit facility.

Shares in the company, which have lost 60% of their value so far this year, traded up 3% to 394 pence in London following the news.

($1 = 0.8497 euros) (Reporting by Thomas Seythal and Sarah Young Editing by Michelle Martin, Kirsten Donovan)

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