TUI AG launches equity-linked financing in shares of TUI Travel PLC

TUI AG has decided to launch an equity-linked financing in shares of TUI Travel PLC using a part of its stake in TTP. The initial issue size of the financing will be EUR 450 mln but may be increased at the option of TUI by up to EUR 50 mln to EUR 500 mln. TUI is raising finance on attractive terms and providing TTP with greater financial autonomy whilst remaining committed to its “two pillar” strategy of tourism and shipping. TUI will continue to fully consolidate the accounts of TTP.

TUI will enter into contracts with Deutsche Bank which, in turn, will enter into contracts with Nero Finance, a Jersey company which will issue exchangeable bonds with a cash settlement option with shares in TTP as underlying. TUI will not have any stake in Nero Finance. As part of the financing, TUI will sell the shares to Deutsche Bank which will represent up to 9.1% of TTP’s share capital (assuming an issue size of EUR 450 mln and based on the assumptions stated below). The shares will be transferred from Deutsche Bank to Nero Finance.

TUI intends to use the proceeds of the financing to replace existing credit lines in order to strengthen its financial profile and for general corporate purposes.

Following the completion of the financing, TTP will be able to raise debt on a stand-alone basis.

Nero Finance will issue the bonds and transfer the proceeds from the issuance of the bonds to Deutsche Bank for onward transfer to TUI. Corresponding to the size of the financing, the initial issue size of the bonds will be EUR 450 mln. In addition, TUI has an upsize option in order to enable an increase of the financing by up to EUR 50 mln. The maximum issue size of the bonds and, accordingly, also the proceeds of the financing, can therefore amount to EUR 500 mln.

Based on Tuesday’s closing price of GBp 255 per share and a EUR/GBP rate of 1.342, 97.4 – 101.2 mln shares would be underlying the bonds at the outset.