TUI AG has extended its existing credit lines until summer 2024, giving the Group more time and flexibility and strengthens TUI in a market environment with ongoing pandemic restrictions.
The Group states that its objective remains a rapid repayment of the government loans as soon as more holiday destinations can be travelled to in a stable manner again and the successful relaunch of tourism continues in a sustainable manner. The company states that pent-up demand and interest in travel remain at high levels in Europe and TUI's international markets but that, as expected, the summer business, which has got off to a good start, is currently focused on a few holiday destinations such as Greece, Spain and Cyprus, domestic tourism and cruises.
TUI has agreed with the 19 private banks and KfW to extend the maturity of the credit line totalling €4.7 billion by two years to summer 2024. Based on TUI's current rating, the margin after extension for the RCF tranches will be 4.50% per annum.
As of 26 July 2021, TUI had pro forma liquid funds of around €2.9 billion at its disposal (taking into account the announced sale of 21 properties to the Riu family are in the form of undrawn credit lines).
TUI CEO Fritz Joussen said: "TUI is returning to the growth path. We are well positioned with our tour operators, hotel and cruise brands and we will be more efficient and digital after the Corona crisis. The banks support our strategy, our path of transformation and see TUI's strengths after the Corona crisis. We are now financed in the medium term until summer 2024. This creates stability and flexibility as long as Corona restrictions still affect the business and markets. The 2021 summer season has started well, demand for holidays and travel remains high in all of TUI's European markets. Vaccinations continue to be the key to more freedom for all and also for travel."
TUI Group's revolving credit facilities currently stand at €4.8 billion. For regulatory reasons due to Brexit, the credit line of a British bank (around €80 million cash and €25 million guarantee line) cannot be extended beyond summer 2022, so that thereafter the credit lines will total €4.7 billion until 2024.
The TUI Group's current credit facilities comprise: €1.75 billion credit line from 20 private banks (incl. €215 million guarantee line), €1.8 billion KfW from the first stabilisation package, €1.05 billion KfW from second stabilisation package, €200 million KfW and private banks from last stabilisation package.
In addition, the upcoming covenant tests (review of financial ratios) on 30 September 2021 and 31 March 2022 were already suspended in the run-up to the extension, confirms TUI.