The TUI Group says it has met two conditions for a second financial aid package from the German federal government.
The new loan was dependent on the issuing of a convertible bond of €150 million to Germany’s Economic Stabilization Fund, and a waiver by TUI’s bondholders on its senior notes due next year.
Both have now been fulfilled ahead of the 30 September set deadline.
Along with a credit line of €1.05 billion, TUI Group now has an additional €1.2 billion and total financial resources of about €2 billion.
The company says it now has the liquidity to see through the seasonal fluctuations of winter 2020-2021 and it strengthens its position in a still uncertain market.
“We continue to operate in a very volatile market environment. Travel advice and travel disruptions in our markets and destinations are constantly changing. There are still significant restrictions on worldwide travel through Covid-19 and on our business. This makes planning more difficult and requires enormous flexibility from tour operators,” said Fritz Joussen, CEO of the TUI Group.
“The increased stabilisation package with government loans will above all secure liquidity during the pandemic. We have to bridge this period without any significant turnover and at the same time accelerate the restructuring for the post-Covid-19 period.”
TUI will become a more digital and efficient business, Joussen said.
He also pledged to make TUI a more sustainable tourism business, ‘even if the current focus has to be on overcoming the crisis’.
TUI received commitment for an initial stabilisation package in March.
An initial €1.8 billion helped top up TUI’s existing credit facility, before the second tranche was agreed by the government.