TUI erhält weiteren KfW Kredit

TUI slides further into the debt trap due to Corona crisis

Cindy Bauernfeind
13.08.2020
2 minutes

The large German tourism group TUI had to struggle hard with the effects of the Corona crisis in recent months. Due to the crisis, TUI had to cancel almost all holiday offers, resulting in a loss of approximately 1.45 billion euros in the third quarter. Now only radical cost-cutting measures and a second state loan can save the travel group.

At the beginning of the year, TUI already received a loan of 1.8 billion euros from the KfW. Now, due to the negative quarterly results, there is a further loan of 1.05 billion euros. This is the only way the company has a long-term chance of bridging the business slump and remaining commercially viable. In addition, 150 million euros are to be issued via a convertible bond to the state government fund WSF with a term of six years. If TUI has not repaid its loans by then, the government can become co-owner of the travel group by converting the bonds with up to nine percent.

In addition to the state aid, CEO Friedrich Joussen announced an extensive savings programme. The cost savings resulting from the Corona crisis include, for example, postponements of new hires and cuts in administrative costs.

Nevertheless, the future forecasts for TUI are optimistic. Joussen expects the corona situation to stabilise soon. He expects the company to be able to cover its costs again by the end of the current quarter. According to Joussen, travel bookings for the coming year are also developing positively again.

Picture © TUIfly

by Cindy Bauernfeind

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