TUI has secured an additional €1.2 billion in stabilisation funding from German state-owned development bank KfW.
The deal will see the holiday giant extend an existing credit line by €1.05 billion.
The drawing of this amount is subject to TUI issuing a convertible bond in the amount of €150 million to the Economic Stabilisation Fund and a waiver by the bondholders of the senior notes due in October next year.
Both conditions as well as other formal requirements need to be fulfilled by September 30th.
The company said the €1.2 billion stabilisation package strengthens its position and would provide sufficient liquidity in the current volatile market environment.
TUI chief executive, Fritz Joussen, said “The additional stabilisation package allows us to focus on the operations and at the same time to drive forward the realignment of the group.
“Already before the pandemic, we had initiated the next transformation of TUI: the transformation into a digital platform company.
“This transformation will now be significantly accelerated.
“Our integrated business model is intact. Summer holidays are taking place again in all markets.
“We introduced massive cost reductions early and implemented them quickly and consistently.
“However, no one knows at present when a vaccine or medication will be available and what effects the pandemic will have in individual markets in the coming months.
“Therefore, it is right and important to take further precautions together with the German Federal government.”
Return to Market
Also today, TUI said it had successfully resumed travel activities in all European markets.
In mid-June, the company was the first travel company to bring German guests to Majorca in a pilot project.
After the official end of the travel warnings for most European destinations, holidays were also launched in the remaining TUI markets at the beginning of July.
In July, more than half a million customers across Europe travelled with TUI on their summer holidays.
Furthermore, demand for holidays remains “very high” - since the resumption of travel activities, 1.7 million new bookings have been received group-wide.
However, TUI reported added losses on an EBIT basis for the first nine months of year, including the impact of Covid-19, totalled €1.9 billion.
Joussen added: “Our integrated business model with aircraft, transfers, hotels and cruise ships is intact and has proved its worth in this difficult environment.
“During the crisis it has enabled us to be the first travel company to fly guests on holiday.
“The summer holidays are conducted responsibly and with the highest standards of hygiene in all markets.”