LONDON (Reuters) -TUI Group, the world’s biggest holiday company, is considering all options including disposals and a capital raise to pay down new debt taken on to help it survive the pandemic which pushed it to a 3 billion euro ($3.6 billion) annual loss.
Days after the Hannover, Germany-based company secured a third bailout from the German government to stabilise its finances, its chief executive said it was looking at all levers to repair its balance sheet.
“It might be also M&A, it might be ... new investment structures for our assets...or it might be also another capital increase...we cannot exclude any of these,” CEO Fritz Joussen told reporters on Thursday.
Shares in TUI traded down 3% at 0901 GMT. They have lost 55% of their value in the year to date, giving the company a market capitalisation of 2.6 billion pounds ($3.5 billion).
TUI will need to start repaying some of its COVID-19 related debts in 2022, said Joussen, adding that he was focusing on trying to reduce about 2.2 billion euros of the pandemic-related debt.
Cost savings of 400 million euros annually, up from a previous 300 million euro target, would initially help. He also said that TUI would sell its UK-based Marella cruise line but continue to operate it and offload some of its 400 hotels which are regarded as non-core.
For the 12 months ended Sept. 30, TUI posted a loss of 3 billion euros, from 894 million euros of underlying core earnings (EBIT) last year, after customer numbers slumped from pre-COVID levels of about 23 million annually to 2 million last summer.
Positive news about the vaccine and bookings for next year gave TUI confidence that demand for holidays will return and reach pre-pandemic levels in 2022.
Joussen said that TUI had no plans to ban customers who had not had the COVID-19 vaccine and that testing would remain key over the coming year, with TUI already carrying out antigen tests on most passengers.
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Reporting by Sarah Young; Editing by Tom Hogue, Sherry Jacob-Phillips and Emelia Sithole-Matarise
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