The world's biggest holiday company, TUI Group, is considering all options including disposals and a capital raise to pay down new debt taken on to help it survive the COVID-19 pandemic which pushed it to a €3 billion annual loss.
Days after the Hannover, Germany-based company secured a third bailout from the German government to stabilise its finances, its chief executive said that it is looking at all levers to repair its balance sheet.
"It might be also M&A, it might be...new investment structures for our assets...or it might be also another capital increase...we cannot exclude any of these," CEO Fritz Joussen told reporters.
Shares in TUI have lost 55% of their value in the year to date, giving the company a market capitalisation of £2.6 billion.
TUI will need to start repaying some of its COVID-19 related debts in 2022, said Joussen, adding that he is focussing on trying to reduce approximately €2.2 billion of the pandemic-related debt.
Cost savings of €400 million annually, up from a previous €300 million target, will initially help. He also said that TUI will sell its UK-based Marella cruise line but continue to operate it and offload some of its 400 hotels which are regarded as non-core.
For the 12 months ended that on September 30, TUI posted a loss of €3 billion, from €894 million of underlying core earnings (EBIT) last year, after customer numbers slumped from pre-COVID levels of approximately 23 million annually to two million last summer.
Vaccine And Bookings For Next Year
Positive news about a COVID-19 vaccine and bookings for next year has given TUI confidence that demand for holidays will return and reach pre-pandemic levels in 2022.
Joussen said that TUI has no plans to ban customers who have not had the COVID-19 vaccine and that testing will remain key over the coming year, with TUI already carrying out antigen tests on most passengers.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
