Tui mulls capital raise after trading hammered by pandemic

Travel giant Tui has said it is mulling a capital raise after the holiday sector was hammered by the pandemic.

However, the company said it would be “significantly lower” than the one billion to 1.5 billion euros (£910 million to £1.35 billion) mentioned in press reports.

It comes shortly after the business received a 1.2 billion euro (£1.1 billion) injection of state aid from the German government to see it through the tough winter period.

In a statement, Tui said: “In view of the still very volatile market environment resulting from the Covid-19 crisis, it continues evaluating various measures to achieve an optimal balance sheet structure and maturity profile.”

A short to mid-term capital raise is among the measures being considered, it added.

However, it stressed that a decision on such a measure has not yet been made, and its timing or size has also not yet been determined.

It came after Fritz Joussen, chief executive of Tui, said that the company was considering selling some of its 400 hotels or its UK-based Marella cruise line in order to shore up its balance sheet, according to the Financial Times.

The tour operator said on Thursday that it will retire one of its Marella vessels, leaving it with four ships and resulting in the cancellation of multiple cruises next year.

Tui has been hit particularly hard by the pandemic, as it saw summer bookings dive by 83% against last year.

Last week, it made further cuts to winter capacity due to changing restrictions.

It said that holiday prices also slipped by 19%, while it has also seen winter sales fall 59% against the same period last year.

Tui revealed proposals to axe 8,000 jobs and shut 166 of its high street stores earlier in the pandemic as part of its cost-cutting plans.