TUI is closer to settling the substantial financial aid it received from German authorities during the pandemic.
TUI chief financial officer Mathias Kiep said the company made an important step back to profitability by launching its intended $1.9 billion capital raise in a LinkedIn post on Friday, 24 March.
“On the back of our strong operational recovery and following an intense journey of preparation — most recently our AGM in February and the 10:1 reverse stock split thereafter. With the proceeds of the capital increase, we intend to repay the Corona state aid in full.”
Kiep initially announced the raise plans during the company’s 2023 first quarter interim results, stating it would take place under the right market conditions after the company’s Economic Stabilization Fund debt had been recalculated from some $775 million to just short of $1 billion.
Germany’s Economic Stabilization Fund was instrumental in ensuring the survival of German-based travel companies, including Lufthansa, with its initial lifeline stoking claims of an unfair advantage. It saw a stricter framework applied to the financial aid received by TUI.
The airline announced towards the end of 2022 that it was set to repay the balance of its state-owned debt.