TUI AG reaches agreement with private investors, banks and the German federal government on additional financing package of ?... (1152339)
December 02 2020 - 9:43AM
UK Regulatory
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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