TUI continues to execute its goal of rapidly deleveraging the Group, reducing interest costs and further reducing Corona state aid. The Corona state aid received in the pandemic is to be returned as quickly as possible and in sequence. TUI's Executive Board and Supervisory Board have therefore today resolved to launch a capital increase against cash contributions excluding shareholders’ subscription rights. The proceeds from the capital increase and existing cash resources are to be used to repay in full the government Silent Participation II of 671 million euros from the German government (Economic Stabilisation Fund, “ESF”).
In addition, the Group will also reduce the outstanding KfW credit lines by 336 million euros to 2.1 billion euros. As a result, in addition to the KfW credit line, the remaining government financing (ESF) for TUI will be the approximately 59 million euros bond with warrants convertible into shares and Silent Participation I, also convertible into shares, of 420 million euros.
The Group had already returned initial credit lines by KfW of around 700 million euros on 1 April 2022. Fritz Joussen, CEO of TUI Group: "We are implementing what we announced and committed to: the further repayment of the Corona aid, and we are doing so as fast as possible. Our goal is to return to normality quickly and focus on new growth. We are in stable waters, the market is intact, and we expect a strong summer of travel and a good fiscal year. For the current full year 2022, we therefore expect to return to significantly positive earnings. With the transformation and realignment of the Group, TUI is leaner, more digital and more efficient. This is the basis for continuing to steadily and swiftly reduce the Corona financial support and lower our debt and interest costs."
For the cash capital increase, TUI plans to issue up to 162,291,441 new shares corresponding to approximately up to 10 percent of TUI AG's share capital. The new shares will be exclusively offered for sale to institutional investors as part of an international private placement. The number of new shares and the placement price per new share will be determined on the basis of an accelerated bookbuilding, which will start immediately.
The new shares will be admitted to trading on the London Stock Exchange in the form of depositary interests and the Regulated Market of the Hanover Stock Exchange and will be included to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange (Xetra).
Barclays, HSBC and UniCredit Bank AG are acting as Joint Global Coordinators and, together with Bank of America, Commerzbank, Crédit Agricole Corporate and Investment Bank and Société Générale, as Joint Bookrunners.
This announcement may not be published, distributed or transmitted in the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, Switzerland or the United Arab Emirates, or in any other jurisdiction in which the distribution, release or publication would be restricted or prohibited. This announcement does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company (the “Securities”) in the United States or any other jurisdiction. The distribution of this announcement into jurisdictions may be restricted by law, and, therefore, persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction.
The Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. Accordingly, the Securities referred to herein will be offered and sold by way of private placement: (i) in the United States, only to qualified institutional buyers in accordance with Rule 144A under the Securities Act, and (ii) outside the United States, to eligible investors in offshore transactions in accordance with Regulation S under the Securities Act. There will be no public offer of Securities in the United States.
In the United Kingdom, this announcement is only directed at persons who are “qualified investors” within the meaning of UK Prospectus Regulation (Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018) and who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”), (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) or (iii) to whom it may otherwise be lawfully communicated (all such persons together being referred to as “Relevant Persons”)). This document must not be acted on, or relied upon, by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
In member states of the European Economic Area the placement of the Securities described in this announcement (the “Placement”) is directed exclusively at persons who are “qualified investors” within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (Prospectus Regulation).
No action has been taken that would permit an offering or an acquisition of Securities or a distribution of this announcement in any jurisdiction where such action would be unlawful. Persons into whose possession this announcement comes are required to inform themselves about and to observe any such restrictions.
This announcement does not constitute a recommendation concerning the Placement. Investors should consult a professional advisor as to the suitability of the Placement for the person concerned.
Certain statements included in this announcement are forward-looking. These statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, they involve risk and uncertainties because they relate to events and depend on circumstances that will occur in the future. Actual results could differ materially from those expressed or implied by such forward-looking statements. The potential reasons for such differences include market fluctuations, the development of world market fluctuations, the development of world market commodity prices, the development of exchange rates or fundamental changes in the economic environment. The Company does not intend or assume any obligation to update any forward- looking statement to reflect events or circumstances after the date of this announcement.
Forward-looking statements often use words such as “expects”, “may”, “will”, “could”, “should”, “intends”, “plans”, “predicts”, “envisages” or “anticipates” or other words of similar meaning. They include, without limitation, any and all projections relating to the results of operations and financial conditions of the Company and its subsidiary undertakings from time to time (the “Group”), as well as plans and objectives for future operations, expected future revenues, financing plans, expected expenditure and divestments relating to the Group and discussions of the Group’s business plan. All forward-looking statements in this announcement are based upon information known to the Group on the date of this announcement and speak as of the date of this announcement. Other than in accordance with its legal or regulatory obligations, the Group does not undertake to update or revise any forward-looking statement to reflect any changes in events, conditions or circumstances on which any such statement is based.
Pursuant to EU product governance requirements, the Securities referred to herein have been subject to a product approval process, under which each distributor has determined that such Securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II. Any distributor subsequently offering the Securities referred to herein is responsible for undertaking its own target market assessment in respect of such Securities and determining appropriate distribution channels.