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It is already the third financial injection this year: the TUI travel group is receiving a 1.8 billion euro crown aid from the federal government and private investors. Competition is critical with government support.
The TUI Group receives more state aid against a possible financial collapse in the Corona crisis. As announced by the world’s largest travel operator from Hannover, it agreed with the federal government, as well as private investors and banks, a financing package of 1.8 billion euros.
The package strengthens TUI’s position and provides it with sufficient liquidity reserves, he said. “This also compensates for the travel restrictions that were adopted until the beginning of the 2021 summer season.” The help had become necessary due to increasing travel restrictions due to the increasing number of infections. Many customers would have changed their booking behavior on short notice.
The Federal Ministry of Economy described the decided aid measures as important for TUI in order for the travel agency to get through the difficult period. “The company was profitable before the crisis and, as a company in the travel industry, it has to deal with unprecedented difficulties due to the Corona crisis,” said a spokeswoman for Minister Peter Altmaier.
State funds can appoint two members of the supervisory board
According to TUI, the financing package specifically foresees a capital increase of around 500 million euros, which will be carried out by private investors. In addition, there is a silent contribution from the State Fund for Economic Stabilization (FSM) convertible into TUI shares for a value of 420 million euros and a silent non-convertible contribution from the FSM for an amount of 280 million euros. However, the EU Commission has yet to approve the silent partnership.
This was preceded by negotiations with the federal government. Two people appointed by the WSF will become members of the TUI Supervisory Board. The state WSF serves to stabilize the economy as a result of the corona pandemic. It provides companies with stabilization measures to strengthen their capital base and overcome liquidity bottlenecks. In this way, the federal government had already launched a rescue package worth billions for Lufthansa.
Criticism of billions in aid of Rewe boss
According to TUI, the financing package also includes a state guarantee of 400 million euros or, alternatively, a corresponding increase in the silent non-convertible contribution of the FSM and an additional credit line from the state bank KfW for 200 million euros. An existing KfW credit line will also run until July 2022. TUI announced that the silent holdings of the FSM were linked to additional restrictions, including with regard to investments in other companies.
In spring, TUI was the first large German company to be supported by the state development bank KfW with a loan of 1.8 billion euros. In addition to the Hannover-based group and Lufthansa, travel competitor FTI also receives public support. At the end of September, TUI had 1.2 billion euros available in the form of a second line of credit and a bond that the federal government can convert into Group own shares.
The head of the retail group Rewe, Lionel Souque, voiced his criticism of the billions in aid for TUI and FTI two weeks ago. The DER Touristik travel company also belongs to the Rewe Group. “I am very hopeful that our competitors will fully reimburse the aid they have received after the crisis and that the state will not turn a blind eye,” Souque told Manager Magazin. If this is not the case, it would be “extremely unfair” in their opinion.
