TUI AG reaches agreement with private investors, banks and the German federal government on additional financing package of ?... (1152339)

 
 TUI AG (TUI) 
TUI AG reaches agreement with private investors, banks and the German 
federal government on additional financing package of &euro1.8 billion 
 
02-Dec-2020 / 15:43 CET/CEST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
TUI AG reaches agreement with private investors, banks and the German 
federal government on additional financing package of &euro1.8 billion, 
including an approx. &euro 500 million capital increase with subscription 
rights and a &euro 420 million convertible silent participation by the 
Economic Support Fund 
 
Inside information pursuant to Article 17 MAR 
 
TUI AG has agreed with Unifirm Ltd., a syndicate of underwriting banks, KfW 
and the Economic Support Fund (_Wirtschaftsstabilisierungsfonds_ - WSF) on a 
further financing package of &euro 1.8 billion for TUI. 
 
The package includes 
 
- a capital increase with subscription rights of approx. &euro 500m; 
 
- a silent participation convertible into shares of TUI by the WSF of &euro 
420m; 
 
- a non-convertible silent participation by the WSF of &euro 280m; 
 
- a state guarantee of &euro 400m, or, alternatively, a respective increase 
of the non-convertible silent participation by the WSF; and 
 
- an additional credit facility by KfW of &euro 200m, and a prolongation of 
an existing credit facility by KfW until July 2022. 
 
The financing package strengthens TUI's position and provides it with 
sufficient liquidity reserves in this volatile market environment. It also 
balances out the presumed travel restrictions until the beginning of the 
2021 summer season. The package became necessary due to the increasing 
travel restrictions caused by the rising number of infections and the 
associated more short-term booking behaviour of some customers. 
 
This further financing package supplements the existing financing measures 
of the Federal Republic of Germany in the form of a KfW credit line at a 
total of &euro 2.85 billion and a WSF warrant bond of &euro 150 million with 
option rights for approx. 58.7 million shares. 
 
The financing package includes a WSF financing measure in the form of a 
silent participation without a participation in losses generated by TUI, 
which can be converted into shares of TUI, in the amount of &euro 420 
million (Silent Participation I), and a further silent participation with a 
participation in losses generated by TUI of &euro 280 million (Silent 
Participation II). 
 
The conversion price for the WSF in respect of the Silent Participation I is 
&euro 1.00 per share. In case of a conversion of the Silent Participation I 
the WSF will obtain a participation in TUI of not more than 25% plus one 
share. 
 
The agreement on the silent participations is, _inter alia_, subject to the 
approval of the European Commission under state aid rules, the granting of 
the necessary merger control approvals (where there is a prohibition on 
implementation) and the implementation of the other components of the 
financing package. 
 
In addition, KfW has undertaken - subject to market standard conditions - to 
participate in a further secured credit line of &euro 200 million and to 
grant a prolongation of a portion of the existing KfW credit line. The 
prolongation relates to a part of the existing KfW credit line of &euro 500 
million, which would have otherwise ceased to be available on 1 April 2021 
and which will after the prolongation have the same maturity as the rest of 
the existing KfW credit line. The agreement on the participation by KFW is, 
_inter alia_, subject to the implementation of the other components of the 
financing package. 
 
The financing package also provides for a reduction of TUI's share capital 
from &euro 2.56 per share to &euro 1.00 per share (without merging shares), 
followed by a capital increase by means of a rights issue of approx. 509 
million shares. The reduction of the share capital, the capital increase and 
the conversion rights of the WSF under the Silent Participation I are to be 
resolved at an extraordinary general meeting of TUI in January 2021. The 
subscription price shall be &euro 1.07 per share, implying net proceeds 
after fees and expenses of approx. &euro509 million. As TUI's largest single 
shareholder, holding approx. 24.89 % of the shares, Unifirm Ltd. has 
irrevocably committed to exercise its subscription rights in this capital 
increase (the Confirmed Acquisition Declaration). 
 
The remainder of the capital increase will be safeguarded through 
underwriting commitments, subject to certain terms and conditions. In this 
respect, Unifirm Ltd. has undertaken, in addition to its Confirmed 
Acquisition Declaration, and if the current shareholders do not subscribe to 
their new share entitlements, that it will (i) subscribe for further newly 
issued shares up to a total stake of 36%, where this is possible without 
making a mandatory offer to the other shareholders of TUI based on an 
exemption from BaFin under the German Securities and Takeover Act 
(Wertpapiererwerbs- und Übernahmegesetz, _WpÜG_) (the Conditional 
Commitment), and (ii) otherwise subscribe for further newly issued shares up 
to a total stake of 29.9% (the Unconditional Underwriting Commitment). The 
remaining part of the capital increase will be secured through a market 
standard underwriting by a banking syndicate, subject to terms and 
conditions in line with market practice for similar transactions, also as 
far as the aforementioned exemption for Unifirm Ltd. should not be granted 
by BaFin. 
 
The proceeds of the capital increase will be used to repay &euro 300 million 
senior notes of TUI (due in October 2021) and so will provide a significant 
contribution to the extension of TUI's maturity profile. The remaining 
amount of the capital increase, and more generally the financing package, is 
intended to strengthen TUI's liquidity or to be used for general corporate 
purposes. 
 
The financing measure shall also include a guarantee credit facility in the 
amount of &euro 400 million. The guarantee credit facility will be supported 
by a state guarantee, potentially including the federal states. It is 
intended to enable access to funds currently deposited for so-called cash 
collaterals by replacing the cash collaterals with guarantees. As an 
alternative, the Silent Participation II of the WSF will be increased. 
 
Including the financing package now agreed, as of 30 November 2020 TUI has 
pro forma financial resources and credit facilities of &euro 2.5 billion 
post &euro 300m Senior Notes redemption. 
 
In addition to the restrictions under the existing KfW loan, such as TUI's 
waiver of dividend payments and a restriction on share buy-backs, the silent 
participations by the WSF come with further restrictions, including relating 
to investments in other companies as long as the WSF remains invested. In 
addition, to the extent permitted by law, the Executive Board and the 
Supervisory Board shall procure that two persons nominated by the WSF become 
members of the Supervisory Board of TUI. 
 
Given the UK Listing Rules applicable to TUI as a premium-listed company on 
the London Stock Exchange, TUI points out the following: the maximum 
aggregate underwriting commitment of Unifirm Ltd. (for the purposes of the 
UK Listing Rules, i.e. beyond the exercise of the subscription rights for 
Unifirm's existing stake in TUI as per the Confirmed Acquisition 
Declaration) is &euro 130.7 million and it, together with the maximum fees 
payable, falls within the smaller related party transactions provisions of 
UK Listing Rule 11.1.10R. Unifirm Ltd. will receive an underwriting fee of 
2.75% for its Unconditional Underwriting Commitment and an underwriting fee 
of 2.00% for its Conditional Underwriting Commitment. 
 
As required by Listing Rule 11.1.10R, Merrill Lynch International, which is 
acting as joint sponsor, together with Deutsche Bank AG, London Branch, to 
TUI for UK Listing Rules purposes in respect of the related party 
transaction described above, has provided written confirmation to TUI that 
the terms of Unifirm Ltd.'s underwriting commitments, in its opinion, are 
fair and reasonable as far as the shareholders of TUI are concerned. 
 
Not least in view of the imminent availability of vaccines against COVID-19, 
TUI expects a significant reduction in current travel restrictions, and thus 
a significant further improvement in its working capital and liquidity 
situation. Holidays continue to be a high priority for our customers, and we 
continue to work on different demand scenarios for the coming seasons. 
 
*ANALYST & INVESTOR ENQUIRIE**S* 
 
Mathias Kiep, Group Director Investor  Tel: +44 (0)1293 645 925/ 
Relations                              +49 (0)511 566 1425 
and Corporate Finance 
 
Nicola Gehrt, Director, Head of Group  Tel: +49 (0)511 566 1435 
Investor Relations 
*Contacts for Analysts and Investors 
in UK, Ireland and Americas* 
Hazel Chung, Senior Investor Relations Tel: +44 (0)1293 645 823 
Manager 
Corvin Martens, Senior Investor        Tel: +49 (0)170 566 2321 
Relations Manager 
*Contacts for Analysts and Investors 
in Continental Europe, Middle East and 
Asia* 
Ina Klose, Senior Investor Relations   Tel: +49 (0)511 566 1318 
Manager 
*Media* 
Kuzey Alexander Esener, Head of Media  Tel: + 49 (0)511 566 6024 
Relations 
 
DISCLAIMER 
 
This announcement contains a number of statements related to the future 
development of TUI. These statements are based both on assumptions and 
estimates. Although we are convinced that these future-related statements 
are realistic, we cannot guarantee them, for our assumptions involve risks 
and uncertainties which may give rise to situations in which the actual 
results differ substantially from the expected ones. The potential reasons 
for such differences include market fluctuations, the development of world 
market fluctuations, the development of world market commodity prices, the

development of exchange rates or fundamental changes in the economic 
environment. Actual results may also differ from those expressed or implied 
in the forward-looking statements as a result of the effects of the COVID-19 
pandemic and uncertainties about its impact and duration. TUI does not 
intend or assume any obligation to update any forward-looking statement to 
reflect events or circumstances after the date of this announcement. 
 
The shares of the Company are not and will not be registered under the U.S. 
Securities Act of 1933, as amended (Securities Act), and may not be offered 
or sold in the United States absent registration or an applicable exemption 
from the registration requirements of the Securities Act. 
 
Deutsche Bank, AG (London Branch) and Merrill Lynch International are each 
acting exclusively for TUI AG in connection with the related party 
transaction described above and for no one else and will not be responsible 
to anyone other than TUI AG for providing the protections afforded to their 
respective clients or for providing advice in relation to such matters. 
 
ISIN:           DE000TUAG000 
Category Code:  MSCU 
TIDM:           TUI 
LEI Code:       529900SL2WSPV293B552 
OAM Categories: 2.2. Inside information 
Sequence No.:   88926 
EQS News ID:    1152339 
 
End of Announcement EQS News Service

(END) Dow Jones Newswires

December 02, 2020 09:43 ET (14:43 GMT)

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