Inside Information according to article 17 MAR
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THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW SHARES OR OTHER SECURITIES. NEITHER THIS COMMUNICATION NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS OR THE INTERNATIONAL OFFERING CIRCULAR.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION CONCERNING ANY INVESTOR'S DECISION OR OPTIONS WITH RESPECT TO THE OFFERING (AS DEFINED BELOW). THE PRICE AND VALUE OF SECURITIES OF THE COMPANY CAN GO DOWN AS WELL AS UP. PAST PERFORMANCE IS NOT A GUIDE TO FUTURE PERFORMANCE. THE CONTENTS OF THIS ANNOUNCEMENT ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH SHAREHOLDER OR PROSPECTIVE INVESTOR SHOULD CONSULT HIS, HER OR ITS OWN INDEPENDENT LEGAL ADVISER, BUSINESS ADVISER, FINANCIAL ADVISER OR TAX ADVISER FOR LEGAL, FINANCIAL, BUSINESS OR TAX ADVICE.
This announcement is an advertisement and is not a prospectus within the meaning of the Regulation (EU) 2017/1129, as amended, and the Prospectus Regulation EU 2017/1129 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 or otherwise.
Hanover, 24 March 2023. Further to the agreement with the German Economic Stabilization Fund (“WSF”) on the repayment of stabilization measures and following the successful implementation of the 10:1 reverse stock split resolved at the 2023 Annual General Meeting, the Executive Board of TUI AG ("TUI” or, the “Company", and, together with its consolidated subsidiaries, the “Group”) resolved today, with the consent of the Supervisory Board of the Company, to launch a capital increase with subscription rights (the “Subscription Rights”) from the Authorised Capital 2022/I and Authorised Capital 2022/II to raise gross proceeds of c.€1.8 billion (the “Rights Issue” or, the “Offering”).
328,910,448 New ordinary registered Shares with no par value of the Company (the “New Shares”) will be offered at a subscription ratio of 8:3 (8 New Shares for 3 existing shares). The subscription price of €5.55 per New Share represents a discount to TERP (theoretical ex-rights price) of approx. 39.85%.
Alexey A. Mordashov – or any connected person or entity (together, the “Major Shareholder Sanctioned Persons or Entities”) – indirectly holds 30.91% in the Company via Unifirm Limited and Severgroup LLC. These shares are subject to a loss of rights as a result of far-reaching sanctions and under German securities law. The Major Shareholder Sanctioned Persons or Entities can therefore not participate in the Rights Issue and no subscription rights will be granted to them.
The Rights Issue excludes new shares attributable to any Major Shareholder Sanctioned Person or Entity and will be secured through an underwriting commitment by a syndicate of banks, subject to terms and conditions in line with market practice for similar transactions.
Existing shareholders, other than Major Shareholder Sanctioned Persons or Entities, can exercise their Subscription Rights for New Shares during the subscription period from and including 28 March 2023 up to and including 17 April 2023 (the “Subscription Period”) through their respective depositary banks. Investors are recommended to follow the respective guidelines of their depositary banks.
Investors holding depositary interests in the Company’s shares (“DIs”) on 29 March 2023 will be credited with pre-emptive subscription rights (“DI Pre-Emptive Rights) that will allow them to acquire additional DIs representing New Shares. Investors may exercise their DI Pre-Emptive Rights from and including 30 March 2023 (after being credited with them) up to 10:00 (BST) on 17 April 2023 (the “DI Subscription Period”).
The Company intends to use the net proceeds of the Offering of approx. €1.75 billion to reduce interest costs and debt. As previously agreed with the WSF, the €420.0 million convertible Silent Participation I made available by the WSF and the outstanding €58.7 million 2020/2026 Bonds with Warrants, including all warrants, issued to the WSF and including accrued interest at a total market value of around €750 million will be repaid in full. Additionally, the net proceeds will be used for the full repayment of current drawings under the KfW facility. As of 23 March 2023 these amounted to around €440 million. With the remaining net proceeds of approx. €568 million the current drawings under the €1,454 million Cash Facility will be reduced to approx. €870 million. As of 23 March 2023 the drawings under this facility amounted to around €1,438 million. In addition, the Company intends to significantly reduce the €2.1 billion credit line under the KfW facility to €1.1 billion.
Today’s announced capital increase and significant return of government funding allows for a considerable improvement in TUI’s credit metrics and reduces ongoing interest costs, allowing the Group to focus on growth and further market recovery.
As a result of the use of the net proceeds of the Offering, in addition to having repaid the Silent Participation I, the Group’s net debt of €3.4 billion as of 30 September 2022 would have been reduced by around €1.0 billion. This would reduce net interest payments over an equivalent 12 month period, including the Silent Participation I coupon, by approx. €80 million - €90 million. The Company considers that, on the basis of the reduction in its debt position following completion of the Offering and its current expectations in respect of trading performance, its equivalent gross leverage ratio for its financial year 2023 would fall to around 3.0x.
TUI confirms a continuation of its encouraging booking momentum which it reported at its Q1 results on 14 February 2023.
A prospectus (the “German Prospectus”) setting out the full details of the Offering, including a timetable of key dates, is expected to be approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, “BaFin”) on 24 March 2023. For the purposes of the public offering in the United Kingdom and the admission to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s Main Market for listed securities, a separate prospectus (the “UK Prospectus” and together with the German Prospectus, the “Prospectuses”) is expected to be approved on the same day by the FCA. Both Prospectuses will be available on the Company’s website (https://www.tuigroup.com/en-en/investors/capital-increase-march-2023). A copy of the German Prospectus will also be available on the website of BaFin (www.bafin.de) and the website of the European Securities and Markets Authority (ESMA) (https://registers.esma.europa.eu/publication/). A copy of the UK Prospectus will be submitted to the National Storage Mechanism and will be available for inspection at (https://data.fca.org.uk/#/nsm/nationalstoragemechanism). The information in this announcement should be read in conjunction with both the Prospectuses.
All capitalised terms used but not otherwise defined in this announcement have the meaning set out in the Prospectuses.