TUI rescue swells to $5.8bn with third government deal

Bloomberg

TUI AG, the world’s biggest tour operator, will see its rescue funding topped up to 4.8 billion euros ($5.8 billion) after securing a third tranche of aid from the German government and cash from private investors.
The latest package of 1.8 billion euros will include 1.3 billion euros from the state — amassed from federal fund WSF, state-run lender KfW and a state debt guarantee — together with 500 million euros from a shareholder capital increase, Hanover-based TUI said.
TUI appealed for additional aid after a new wave of virus lockdowns in Europe wiped out a hoped-for surge in late summer travel while stunting bookings for sunny winter getaways and ski breaks. The bailout, which adds to earlier rescue packages granted in April and August, was delayed by a debate over what conditions the state should attach, especially how much control the government should have over the company.
TUI was already Germany’s second-biggest coronavirus-bailout recipient, topped only by airline Deutsche Lufthansa. Companies spanning sportswear producer Adidas AG to forklift maker Kion Group AG have already paid back aid or are in the process of doing so.
While the imminent start of Covid-19 vaccine distribution is positive for TUI, people are booking vacations far later than usual in response to ever-changing travel curbs, delaying revenue inflows. The company has also re-booked many customers from the 2020 summer, without taking extra cash.
“The measures agreed are important as the company was profitable before the crisis and is now grappling with unprecedented difficulties,” a spokeswoman for Germany’s economy ministry said.