Tui Group has confirmed plans to issue new share capital valued at €1.1 billion as the battle to recover from the Covid-19 pandemic continues.

Some 523 million new shares will be used, a total of ten new shares for every 21 existing shares.

“Following transformation and restructuring of business areas and the relaunch of tourism in recent months, our focus is now on refinancing and reducing the utilisation of government loans.

“We want to, we can and we will find our way back to economic strength.

“We are working on this relentlessly.

“The new TUI will be leaner, more digital and more efficient.

“But it will continue to set standards in tourism, in quality, innovation and sustainability,” said Tui chief executive, Fritz Joussen.

Unifirm of the Mordashov family supports the strategy and, as the largest shareholder of Tui, has undertaken to exercise all subscription rights attributable to its shareholding of 32 per cent and to subscribe to the new shares accordingly.

The remainder of the capital increase is fully underwritten with Barclays Bank Ireland, BofA Securities, Citigroup, Deutsche Bank and HSBC acting as joint global coordinators and joint bookrunners.

Commerzbank, Landesbank Baden-Württemberg and Natixis will act as joint bookrunners.

TUI intends to use the net proceeds of the capital increase to reduce interest costs and net debt by reducing current drawings under the KFW facilities.