REG-TUI AG TUI AG announces €1.8bn capital increase for repayment of WSF state aid and significant reduction of the KfW credit lines to strengthen its balance sheet

TUI AGAnnouncement

24/03/2023 06:15

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TUI AG (TUI)
TUI AG announces €1.8bn capital increase for repayment of WSF state aid and
significant reduction of the KfW credit lines to strengthen its balance sheet

24-March-2023 / 07:06 CET/CEST
The issuer is solely responsible for the content of this announcement.

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION OR FORWARDING, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, DISTRIBUTION OR FORWARDING WOULD BE
UNLAWFUL. PLEASE READ THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW
SHARES OR OTHER SECURITIES. NEITHER THIS COMMUNICATION NOR ANY PART OF IT SHALL
FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO
ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. ANY DECISION TO PURCHASE,
SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES MUST
BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS OR THE
INTERNATIONAL OFFERING CIRCULAR.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION CONCERNING ANY INVESTOR'S
DECISION OR OPTIONS WITH RESPECT TO THE OFFERING (AS DEFINED BELOW). THE PRICE AND
VALUE OF SECURITIES OF THE COMPANY CAN GO DOWN AS WELL AS UP. PAST PERFORMANCE IS
NOT A GUIDE TO FUTURE PERFORMANCE. THE CONTENTS OF THIS ANNOUNCEMENT ARE NOT TO BE
CONSTRUED AS LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH SHAREHOLDER OR
PROSPECTIVE INVESTOR SHOULD CONSULT HIS, HER OR ITS OWN INDEPENDENT LEGAL ADVISER,
BUSINESS ADVISER, FINANCIAL ADVISER OR TAX ADVISER FOR LEGAL, FINANCIAL, BUSINESS
OR TAX ADVICE.

This announcement is an advertisement and is not a prospectus within the meaning
of the Regulation (EU) 2017/1129, as amended, and the Prospectus Regulation EU
2017/1129 as it forms part of domestic law of the United Kingdom by virtue of the
European Union (Withdrawal) Act 2018 or otherwise.

TUI AG announces launch of a €1.8bn capital increase for repayment of WSF state
aid and significant reduction of the KfW credit lines to strengthen its balance
sheet

Inside Information according to article 17 MAR

Hanover, 24 March 2023. Further to the agreement with the German Economic
Stabilization Fund (“WSF”) on the repayment of stabilization measures and
following the successful implementation of the 10:1 reverse stock split resolved
at the 2023 Annual General Meeting, the Executive Board of TUI AG ("TUI” or, the
“Company", and, together with its consolidated subsidiaries, the “Group”) resolved
today, with the consent of the Supervisory Board of the Company, to launch a
capital increase with subscription rights (the “Subscription Rights”) from the
Authorised Capital 2022/I and Authorised Capital 2022/II to raise gross proceeds
of c.€1.8 billion (the “Rights Issue” or, the “Offering”).

328,910,448 New ordinary registered Shares with no par value of the Company (the
“New Shares”) will be offered at a subscription ratio of 8:3 (8 New Shares for 3
existing shares). The subscription price of €5.55 per New Share represents a
discount to TERP (theoretical ex-rights price) of approx. 39.85%.

Alexey A. Mordashov – or any connected person or entity (together, the “Major
Shareholder Sanctioned Persons or Entities”) – indirectly holds 30.91% in the
Company via Unifirm Limited and Severgroup LLC. These shares are subject to a loss
of rights as a result of far-reaching sanctions and under German securities law.
The Major Shareholder Sanctioned Persons or Entities can therefore not participate
in the Rights Issue and no subscription rights will be granted to them.

The Rights Issue excludes new shares attributable to any Major Shareholder
Sanctioned Person or Entity and will be secured through an underwriting commitment
by a syndicate of banks, subject to terms and conditions in line with market
practice for similar transactions.

Existing shareholders, other than Major Shareholder Sanctioned Persons or
Entities, can exercise their Subscription Rights for New Shares during the
subscription period from and including 28 March 2023 up to and including 17 April
2023 (the “Subscription Period”) through their respective depositary banks.
Investors are recommended to follow the respective guidelines of their depositary
banks.

Investors holding depositary interests in the Company’s shares (“DIs”) on 29 March
2023 will be credited with pre-emptive subscription rights (“DI Pre-Emptive
Rights) that will allow them to acquire additional DIs representing New Shares.
Investors may exercise their DI Pre-Emptive Rights from and including 30 March
2023 (after being credited with them) up to 10:00 (BST) on 17 April 2023 (the “DI
Subscription Period”).

The Company intends to use the net proceeds of the Offering of approx. €1.75
billion to reduce interest costs and debt. As previously agreed with the WSF, the
€420.0 million convertible Silent Participation I made available by the WSF and
the outstanding €58.7 million 2020/2026 Bonds with Warrants, including all
warrants, issued to the WSF and including accrued interest at a total market value
of around €750 million will be repaid in full. Additionally, the net proceeds will
be used for the full repayment of current drawings under the KfW facility. As of
23 March 2023 these amounted to around €440 million. With the remaining net
proceeds of approx. €568 million the current drawings under the €1,454 million
Cash Facility will be reduced to approx. €870 million. As of 23 March 2023 the
drawings under this facility amounted to around €1,438 million. In addition, the
Company intends to significantly reduce the €2.1 billion credit line under the KfW
facility to €1.1 billion.

Today’s announced capital increase and significant return of government funding
allows for a considerable improvement in TUI’s credit metrics and reduces ongoing
interest costs, allowing the Group to focus on growth and further market recovery.

As a result of the use of the net proceeds of the Offering, in addition to having
repaid the Silent Participation I, the Group’s net debt of €3.4 billion as of 30
September 2022 would have been reduced by around €1.0 billion. This would reduce
net interest payments over an equivalent 12 month period, including the Silent
Participation I coupon, by approx. €80 million - €90 million. The Company
considers that, on the basis of the reduction in its debt position following
completion of the Offering and its current expectations in respect of trading
performance, its equivalent gross leverage ratio for its financial year 2023 would
fall to around 3.0x.

TUI confirms a continuation of its encouraging booking momentum which it reported
at its Q1 results on 14 February 2023.

A prospectus (the “German Prospectus”) setting out the full details of the
Offering, including a timetable of key dates, is expected to be approved by the
German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, “BaFin”) on 24 March 2023. For the purposes of the
public offering in the United Kingdom and the admission to the premium listing
segment of the Official List of the FCA and to trading on the London Stock
Exchange’s Main Market for listed securities, a separate prospectus (the “UK
Prospectus” and together with the German Prospectus, the “Prospectuses”) is
expected to be approved on the same day by the FCA. Both Prospectuses will be
available on the Company’s website
(https://www.tuigroup.com/en-en/investors/capital-increase-march-2023). A copy of
the German Prospectus will also be available on the website of BaFin
(www.bafin.de) and the website of the European Securities and Markets Authority
(ESMA) (https://registers.esma.europa.eu/publication/). A copy of the UK
Prospectus will be submitted to the National Storage Mechanism and will be
available for inspection at
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism). The information in this
announcement should be read in conjunction with both the Prospectuses.

All capitalised terms used but not otherwise defined in this announcement have the
meaning set out in the Prospectuses.
 

ANALYST & INVESTOR ENQUIRIES

Nicola Gehrt, Group Director Investor Relations             + 49 (0)511 566 1435
Adrian Bell, Senior Investor Relations Manager              +49 (0)511 566 2332
James Trimble, Investor Relations Manager                   + 44 (0)1582 315 293
Stefan Keese, Investor Relations Manager (Retail Investors) + 49 (0)511 566 1387
Media                                                        
Kuzey Alexander Esener, Head of Media Relations             + 49 (0)511 566 6024

 

   
   
   

IMPORTANT NOTICE

This announcement may not be published, distributed or transmitted in the United
States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa,
Switzerland or the United Arab Emirates, or in any other jurisdiction in which the
distribution, release or publication would be restricted or prohibited. This
announcement does not constitute an offer of securities for sale or a solicitation
of an offer to purchase securities of the Company (the Securities) in the United
States or any other jurisdiction. The distribution of this announcement into
jurisdictions may be restricted by law, and, therefore, persons into whose
possession this announcement comes should inform themselves about and observe any
such restrictions. Any failure to comply with any such restrictions may constitute
a violation of the securities laws of such jurisdiction.

The Securities have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”) or the securities laws
of any state or other jurisdiction of the United States, and may not be offered or
sold within the United States, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and applicable state or local securities laws. Accordingly, the Securities are
being offered and sold by way of private placements (i) in the United States, only
to qualified institutional buyers in accordance with Rule 144A under the
Securities Act, and (ii) outside the United States, to eligible investors in
offshore transactions in accordance with Regulation S under the Securities Act.

This announcement is an advertisement and not a prospectus for the purposes of
Prospectus Regulation (Regulation (EU) 2017/1129, as amended) (the Prospectus
Regulation) and the UK Prospectus Regulation (Regulation (EU) 2017/1129 as it
forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018)
(the UK Prospectus Regulation). The public offering of certain Securities in
Germany and the United Kingdom will be made exclusively by means of and on the
basis of the German Prospectus, when published, of the Company, when it has been
approved by the BaFin in Germany, and on the basis of the UK Prospectus, when
published, of the Company when it has been approved by the FCA in the United
Kingdom, in each case which approval should not be understood as an endorsement of
any Securities offered. Investors must not subscribe for or purchase any
Securities referred to in this announcement except on the basis of information
contained in the German Prospectus or UK Prospectus, as applicable, published, or
the international offering circular issued, by the Company in connection with the
Offering, as the case may be (together with any amendments or supplements
thereto), and should read the German Prospectus, UK Prospectus or the
international offering circular, as the case may be (together with any amendments
or supplements thereto) before making an investment decision in order to fully
understand the potential risks and rewards associated with the decision to invest
in the Securities.

The German Prospectus, once approved, will be available on the website of the
BaFin ( 1 www.bafin.de), the website of the
Company (https://www.tuigroup.com/en-en/investors/capital-increase-march-2023) and
the website of the European Securities And Markets
Authority ( 2 https://registers.esma.europa.eu/publication/).  The UK Prospectus,
once approved, will be submitted to the National Storage Mechanism and will be
available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
and the website of the Company
(https://www.tuigroup.com/en-en/investors/capital-increase-march-2023).

This announcement has been issued by and is the sole responsibility of the
Company. The information contained in this announcement is for background
information purposes only and does not purport to be full or complete. No reliance
may be placed by any person for any purpose on the information contained in this
announcement or its accuracy, fairness or completeness.

This announcement does not constitute a recommendation concerning any investor's
decision or options with respect to the Offering. The price and value of
securities can go down as well as up. Past performance is not a guide to future
performance. The contents of this announcement are not to be construed as legal,
business, financial or tax advice. Each shareholder or prospective investor should
consult his, her or its own independent legal adviser, business adviser, financial
adviser or tax adviser for legal, financial, business or tax advice.

Apart from the responsibilities and liabilities, if any, which may be imposed on
them by the Financial Services and Markets Act 2000, as amended or the regulatory
regime established thereunder, or under the regulatory regime of any jurisdiction
where exclusion of liability under the relevant regulatory regime would be
illegal, void or unenforceable, none of Barclays Bank Ireland PLC, BofA Securities
Europe SA, Citigroup Global Markets Europe AG, COMMERZBANK Aktiengesellschaft,
Deutsche Bank Aktiengesellschaft, UniCredit Bank AG, HSBC Trinkaus & Burkhardt
GmbH, Société Générale, Crédit Agricole Corporate and Investment Bank, ING  Bank
N.V. and Natixis (together, the Banks), Barclays Bank PLC and Merrill Lynch
International (together, the Sponsors), the Sponsors nor any of their respective
affiliates nor any of its or their respective directors, officers, employees,
advisers or agents accepts any responsibility or liability whatsoever and makes no
representation or warranty, express or implied, for the contents of this
announcement, including its accuracy, fairness, sufficiency, completeness or
verification or for any other statement made or purported to be made by it, or on
its behalf, in connection with the Company or the Offering and nothing in this
announcement is, or shall be relied upon as, a promise or representation in this
respect, whether as to the past or future. Each of the Banks, the Sponsors and
their respective affiliates and its and their respective directors, officers,
employees, advisers or agents accordingly disclaims to the fullest extent
permitted by law all and any responsibility and liability whether direct or
indirect, arising in tort, contract or otherwise which it might otherwise have in
respect of this announcement or any such statement. Furthermore, each of the
Banks, Sponsors and/or their affiliates provides various investment banking,
commercial banking and financial advisory services from time to time to the
Company.

Each of the Banks and Sponsors is acting exclusively for the Company in connection
with the Offering and they are acting for no one else. The Banks and Sponsors will
not regard any other person as their respective clients in relation to the
Offering or any other matter in this announcement and will not be responsible to
anyone other than the Company for providing the protections afforded to their
respective clients, nor for providing advice in relation to the Offering, the
contents of this announcement or any transaction, arrangement or other matter
referred to herein.

In connection with the Offering, each of the Banks and any of their respective
affiliates, may take up a portion of the Securities as a principal position and in
that capacity may retain, subscribe for, purchase, sell, offer to sell or
otherwise deal for their own accounts in such Securities and other securities of
the Company or related investments in connection with the Offering or otherwise.
Accordingly, references in this announcement to the Securities being issued,
offered, subscribed, acquired, placed or otherwise dealt in should be read as
including any issue, offer, subscription, acquisition, placing or dealing by each
of the Banks and any of their affiliates in such capacity. In addition, certain of
the Banks or their affiliates may enter into financing arrangements (including
swaps, warrants or contracts for difference) with investors in connection with
which such Banks (or their affiliates) may from time to time acquire, hold or
dispose of Securities. None of the Banks or any of their affiliates intends to
disclose the extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligation to do so.

No person has been authorised to give any information or to make any
representations other than those contained in this announcement and the German
Prospectus or UK Prospectus published, or the international offering circular
issued, by the Company in connection with the Offering, as the case may be
(together with any amendments or supplements thereto) and, if given or made, such
information or representations must not be relied on as having been authorised by
the Company, the Banks, the Sponsors or any of their respective affiliates.

Forward-Looking Statements

Certain statements included in this announcement are forward-looking. These
statements can be identified by the fact that they do not relate only to
historical or current facts. By their nature, they involve risk and uncertainties
because they relate to events and depend on circumstances that will occur in the
future. Actual results could differ materially from those expressed or implied by
such forward-looking statements. The potential reasons for such differences
include market fluctuations, the development of world market fluctuations, the
development of world market commodity prices, the development of exchange rates or
fundamental changes in the economic environment. The Company does not intend or
assume any obligation to update any forward-looking statement to reflect events or
circumstances after the date of this announcement. The potential reasons for such
differences include market fluctuations, the development of world market
fluctuations, the development of world market commodity prices, the development of
exchange rates or fundamental changes in the economic environment. The Company
does not intend or assume any obligation to update any forward-looking statement
to reflect events or circumstances after the date of this announcement.

Forward-looking statements often use words such as “expects”, “may”, “will”,
“could”, “should”, “intends”, “plans”, “predicts”, “envisages” or “anticipates” or
other words of similar meaning. They include, without limitation, any and all
projections relating to the results of operations and financial conditions of the
Company and its subsidiary undertakings from time to time (the ‘Group’), as well
as plans and objectives for future operations, expected future revenues, financing
plans, expected expenditure and divestments relating to the Group and discussions
of the Group’s business plan. All forward-looking statements in this announcement
are based upon information known to the Group on the date of this announcement and
speak as of the date of this announcement. Other than in accordance with its legal
or regulatory obligations, the Group does not undertake to update or revise any
forward-looking statement to reflect any changes in events, conditions or
circumstances on which any such statement is based.

Actual results may differ from those expressed or implied in the forward-looking
statements in this announcement as a result of any number of known and unknown
risks, uncertainties and other factors, many of which are difficult to predict and
are generally beyond the control of the Group, and it is not reasonably possible
to itemise each item. Accordingly, readers of this announcement are cautioned
against relying on forward-looking statements. All forward-looking statements made
on or after the date of this announcement and attributable to the Company are
expressly qualified in their entirety by the primary risks set out in that
section.

Information to Distributors

Solely for the purposes of the product governance requirements contained within:
(a) EU Directive 2014/65/EU on markets in financial instruments, as amended (MiFID
II); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing MiFID II; and (c) local implementing measures (together, the MiFID
II Product Governance Requirements), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any “manufacturer” (for the
purposes of the Product Governance Requirements) may otherwise have with respect
thereto, the Securities the subject of the Offering have been subject to a product
approval process, which has determined that such Securities are: (i) compatible
with an end target market of retail investors and investors who meet the criteria
of professional clients and eligible counterparties, each as defined in MiFID II;
and (ii) eligible for distribution through all distribution channels as are
permitted by MiFID II (the Target Market Assessment). Notwithstanding the Target
Market Assessment, distributors should note that: (i) the price of the Securities
may decline and investors could lose all or part of their investment; (ii) the
Securities offer no guaranteed income and no capital protection; and (iii) an
investment in the Securities is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction with
an appropriate financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or regulatory selling
restrictions in relation to the Offering. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, the Banks will only procure
investors who meet the criteria of professional clients and eligible
counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a)
an assessment of suitability or appropriateness for the purposes of MiFID II; or
(b) a recommendation to any investor or group of investors to invest in, or
purchase, or take any other action whatsoever with respect to the Securities. Each
distributor is responsible for undertaking its own Target Market Assessment in
respect of the Securities and determining appropriate distribution channels.

 

 

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Dissemination of a Regulatory Announcement that contains inside information in
accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

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   ISIN:           DE000TUAG505
   Category Code:  MSCU
   TIDM:           TUI
   LEI Code:       529900SL2WSPV293B552
   OAM Categories: 2.2. Inside information
   Sequence No.:   232220
   EQS News ID:    1591147


    
   End of Announcement EQS News Service

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