TUI Travel cuts Boeing deal to boost finances

TUI Travel cuts Boeing deal to boost finances

U.K. holiday company TUI Travel has announced measures to help it refinance a £900 million pound shareholder loan which include cancelling ten of the 23 orders it has with Boeing for its 787 Dreamliner.

Refinancing measures include raising £440 million of financing through the issue of a convertible bond and additional bank facilities and deferring repayment of £150 million of the shareholder loan beyond the 2011 seasonal peak in net debt (April 2011) as part of a rescheduling of the repayment profile of the loan.

In a trading update, the group said booking volumes for the winter season remain lower than last year, while early bookings for summer 2010 remain in line with last year, with average selling prices up 4%.

TUI also said it continues to believe that the Dreamliner is the ideal aircraft for its long-haul requirements, but after extensive talks with Boeing is it’s cancelling ten orders and adding purchase rights, with no obligation, for a further 13 787 aircraft.

TUI AG, the Group’s majority shareholder which holds or controls 51.6% of the Shares in TUI Travel, will not participate in the Offering.

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