23. Oktober 2015

Reduction in Equity Participation and Additional Funding in TUI Russia & CIS Joint Venture

TUI Group announces that it has entered into arrangements to reduce its equity participation in TUI Russia & CIS, its joint venture with SeverGroup, from 49% to 25%. At the same time, Severgroup will increase their equity participation to 75%. Shareholder loans and bank guarantees made previously to the joint venture have been restructured to reflect the new equity participation ratios. No additional consideration will be received in respect of the reduction in TUI Group’s equity participation.

Immediately following this, both TUI Group and SeverGroup will provide new equity investment in line with the new participation ratios. TUI Group will provide new equity investment of net $3.0m (€2.7m). Furthermore, certain payables by the joint venture to TUI Group businesses will be deferred to provide short-term financing of up to $4.9m (€4.4m) for the Winter 15/16 season. Given the ongoing challenging trading environment for tour operators located in the Russian and Ukrainian source markets these arrangements are prudent as we enter into the off-peak Winter period.

SeverGroup is wholly-owned and controlled by Russian businessman, Alexey Mordashov, who, according to his last voting rights notification, owns approximately 13% of TUI Group and who is therefore considered to be a related party.

This arrangement falls within Listing Rule 11.1.10R and a sponsor's written confirmation has been obtained stating that the arrangements are fair and reasonable as far as TUI Group’s shareholders are concerned.