Exclusive: TUI in talks for up to 1.8 billion euros in additional state aid – sources

By Klaus Lauer, Michael Nienaber and Arno Schuetze

BERLIN/FRANKFURT (Reuters) – Holiday group TUI is in talks with the German government to obtain an additional 1.5 billion to 1.8 billion euros ($1.8-2.1 bln) in state aid as two earlier bailouts this year prove insufficient to cope with the coronavirus-linked travel slump, people close to the matter said.

The money could be granted by Germany’s new economic stabilisation fund WSF and could involve a mixture of equity and hybrid capital, the people said, adding that various options were still under discussion and no decisions had been taken.

Another person said that 1 billion to 2 billion euros in additional aid were being discussed.

While TUI already received a total of 3 billion euros of state-backed loans in two tranches this year, current talks focus on strengthening the highly-leveraged company’s capitalisation, the sources said.

The German government declined to comment. TUI had no immediate comment.

Tour operator TUI has said it could issue new shares but clarified last month that it wanted to wait for its share price to recover before launching any capital increase, adding that asset sales were also an option to generate cash.

The company, which last year took 23 million people on holiday, lost 1.1 billion euros in the quarter through June after COVID-19 halted travel, wiping out revenue and straining its balance sheet as it burned through about 550 million to 650 million euros a month.

It is expected to report financial results for its full fiscal year next month.

(Editing by Maria Sheahan)