The Tui group has secured a two-year extension of credit lines worth €2.7 billion in Germany as it continues to pay down and restructure debt accrued during the Covid-19 pandemic off the back of strong bookings.
Tui confirmed extension of its credit, comprising €1.65 billion made available by a syndicate of 19 banks and €1.05 billion by Germany’s state-owned investment and development bank KfW, today.
Money drawn on the revolving credit line will now be repaid and the facility closed in July 2026 rather than July 2024, with interest rate conditions during the extended period linked to Tui achieving its emissions-reduction targets.
Tui has joined the Science Based Targets Initiative (SBTi) which independently validates companies’ reduction targets.
The group has pledged to reduce the Tui Airlines’ emissions by 24% by 2030, the emissions of its cruise lines by 27.5% and emissions of its hotels – those it owns or operates – by 46.2%.
In a statement, Tui said it would not draw on the KfW credit but retain this “as a buffer” and seek to close it ahead of the July 2026 termination date.
The group raised €1.8 billion from a shares issue to existing shareholders in April which it used to pay down pandemic-era aid from the German state and the KfW bank after reaching an agreement on repayments with the German economic stabilisation fund (WSF) in December.
Shareholders were invited to buy eight new shares for every three existing shares they held at a rate of €5.55 each.
Tui used the money from the shares sale to fully repay the outstanding aid, interest and a bond totalling €750 million to the WSF, and to halve its KfW credit line of €2.1 billion.
At the time, chief executive Sebastian Ebel said: “The full repayment of the Corona state aid was our declared goal. Tui thus has a good balance sheet structure again. We are reducing interest costs and creating a solid basis for the future.”
Tui chief financial officer Mathias Kiep said today: “The successful extension of our credit lines is a key result of the group’s operational and balance sheet recovery and a vote of confidence in Tui. This lays the basis for profitable growth.”
Noting the link between the credit extension and Tui’s emissions targets, he added: “We remain the industry’s pioneer in climate protection.”
The group reported recent booking numbers “above pre-crisis levels” after announcing strong summer 2023 bookings and “high demand in all markets” in results for the six months to the end of March released earlier this month.
Tui said the latest repayments “significantly reduced” the group’s net debt to €3.1 billion, noting: “Tui has kept its promise to repay the state aid as quickly as possible.”