TUI AG has announced the successful completion of capital increase with subscription rights of €1.8bn to help it repay state aid received during the Covid pandemic and travel shutdowns.
TUI, a travel business that operates an airline, said in a statement in German that "the nominal capital of the group will increase by around €329 million to almost $507 million".
"With the proceeds from the capital increase, the stabilisation measures of the WSF will be reduced and the KfW credit line will be significantly reduced", TUI added, referring respectively to the German government's economic stabilisation fund and the German state bank.
The group added that during the subscription period from March 28 to April 17, non-sanctioned shareholders can exercise their subscription rights and purchase new shares at a ratio of 8:3, or 8 new shares for every 3 existing shares, for €5.55 per share. Around 90.9% of the subscription rights were exercised.
Sebastian Ebel, TUI's chief executive, said the business "will use the proceeds of the capital increase to pay back the aid received from the WSF in full, including interest".
"We are reducing our debt and interest costs, TUI is getting a good balance sheet structure. Our focus remains on profitable growth and improved earning power," Ebel added.
TUI added that it will "use the proceeds to fully repay or buy back the silent participation of the WSF in the nominal amount of €420 million and the outstanding bond with warrants including warrants in the nominal amount of around €459 million plus accrued interest at market value", meaning the WSF will get around €750 million.
TUI said it would also repay drawings under the credit lines of around €1bn, while an undrawn KfW credit line of $2.1bn "will be reduced by the same amount".
The capital increase was subscribed by Barclays Bank Ireland PLC, BofA Securities Europe S.A., Citigroup Global Markets Europe AG, COMMERZBANK Aktiengesellschaft, Deutsche Bank Aktiengesellschaft and UniCredit Bank AG as lead joint global coordinators. HSBC Trinkaus & Burkhardt GmbH and Société Générale were co-joint global coordinators. Credit Agricole Corporate and Investment Bank, ING Bank N.V. and Natixis acted as joint bookrunners, with Barclays Bank PLC and Merrill Lynch International as joint sponsors of the company.