TUI Group has finalised a €1.8 billion financing package led by the German government as the company battles the fallout from the Covid-19 pandemic.

The deal, originally announced in early December, involves cash from the German Economic Support Fund (Wirtschaftsstabilisierungsfonds or the WSF), a syndicate of underwriting banks, Unifirm Limited, and the German state-owned development bank KfW.

Fritz Joussen, chief executive of TUI, said of the deal: “Before the Covid-19 pandemic, TUI was a very healthy company.

“The market is intact; the demand is there.

“But we have not been able to generate any significant revenues since March.

“Our integrated business model allows us to react very flexibly to short-term changes in the pandemic situation, just as we successfully ramped up our travel programme for a few weeks in July after the first wave.

“People want to travel; tourism remains a growth industry and an important sector for stabilising the southern euro area.”

The package consists of silent participations of the WSF, a further credit line of the KfW, guarantees and a capital increase with subscription rights.

The Mordashov family, owners of Unifirm, have made a long-term strategic investment in TUI and has agreed to participate in the capital increase with its company.

Joussen added: “The financial package provides the security to look consistently ahead and to prepare the group strategically and structurally for the time after the pandemic.”