TUI AG (LON:TUI), the Anglo-German tour operator, has been given an extra €1.05bn rescue loan from the German government to help it through the winter.
The FTSE 100-listed group also said the easing of travel restrictions in Europe in recent weeks has had “an immediate positive effect on working capital”, with customers buying holidays for this summer as well as for the winter and next summer.
With the new loan cash from German state-owned development bank KfW and a €150mln convertible bond to be issued to the central European country’s Economic Stabilization Fund (WSF), which could be worth up to a 9.5% stake, TUI's available liquidity has been boosted up to around €2.4bn.
In total the €1.2bn package “strengthens TUI's position and would provide sufficient liquidity in this volatile market environment to cover TUI's seasonal swing through winter 2020/21 and thereafter and in the case of any further long-term travel restrictions and disruptions related to COVID-19”, the company said in a statement on Wednesday.
This follows another €1.8bn package offered by the KfW in April.
Both loans come with restrictions, such as a dividend holiday and a restraint of share buy-backs, with the WSF also demanding further limitations regarding investments in other companies and the remuneration for board members as long as the WSF remains invested.