With the proceeds from the bond with warrants and the increase in the KfW credit line of 1.05 billion euros, TUI Group will have a further 1.2 billion euros at its disposal. Including this second stabilisation package, TUI will then have financial resources of around 2.0 billion euros1. The package ensures sufficient liquidity to cover the seasonal fluctuations over winter 20/21 and also strengthens the Group's position in the current volatile market environment.
Fritz Joussen, CEO of the TUI Group: "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. 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 more digital and efficient. In addition, we want to continue to set standards for more sustainability in tourism in the future, even if the current focus has to be on overcoming the crisis."
In March 2020, TUI received the commitment for an initial stabilisation package. The KfW tranche of 1.8 billion euros was used to top up TUI's existing bank revolving credit facility ("RCF"). Two conditions were met for the second stabilisation package: the existing creditors of the bond due in October 2021 waived a possible future limit on financial indebtedness. In addition, TUI is issuing a bond with warrants, which will be subscribed exclusively by the WSF.
The bond with a volume of 150 million euros has an initial term of six years and bears interest at 9.5 per cent p.a. After repayment of the KfW second amount of 1.05 billion euros, TUI has an ordinary right of redemption. The bond will be used to issue separable warrants, the full exercise of which would result in a 9 per cent stake in TUI AG at the present time. TUI is thus making use of its existing authorisation to issue a bond with warrants, excluding subscription rights. The conversion price per share was set at the minimum amount of 2.56 euros. The options have a term of 10 years and can be converted into TUI shares at any time.
1 as per September 20, 2020