TUI Travel has outlined plans to raise £500 million to fund acquisitions through the issue of a convertible bond and new banking facilities.
In a statement to markets Europe’s, largest travel organisation said the initiative was designed to ensure the group was well placed to exploit its strong pipeline of attractive acquisition opportunities.
The Crawley, England, based organisation also stated it planned to take advantage of present favourable convertible bond market conditions, while building on the success of its debut convertible bond issue in October 2009.
Funds will also be used to extend and diversify TUI’s debt maturity profile and broaden its sources of finance.
Trading on Track
TUI – in which Germany’s TUI AG has a controlling stake of 54.9 per cent – also confirmed trading was “in line with its previous trading statement”, issued on March 24th 2010.
At this time the group reported strong trading trends and reiterated that it remains well positioned to meet the board’s expectations for underlying operating profit for the year ending September 30th 2010.
The news comes despite sustained disruption caused by the Icelandic volcanic crisis, which has seen 100,000 flights grounded across Europe.
“In the UK, most customers who were due to go on holiday, and whose flights have been cancelled, are choosing to re-book their holidays for a later date,” explained a statement.
“Also, trading has remained robust despite the closure of UK airspace, with booking volumes since April 15th 2010 well ahead of the same period in the prior year (excluding the impact of re-booking of cancelled flights).”
TUI Travel has previously estimated the cumulative cost to the group, up to and including April 19th 2010, as circa £26 million.
Estimated daily costs thereafter are expected to run at approximately £5 million to £6 million.
These costs are one-off in nature and will be disclosed accordingly.