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Tui share sale may cast shade on investors’ summer

2 minute read

A Tui plane takes off from an airport in Palma de Mallorca, Spain, July 29, 2018. REUTERS/Paul Hanna

LONDON, June 16 (Reuters Breakingviews) - Northern Europeans holidaying in Greece are usually recognisable by their burnt visages. Investors in Tui (TUIGn.DE) may soon feel similar discomfort. Europe’s largest package tour group is exploring raising 1 billion euros to repay copious state aid, Bloomberg reported on Wednesday.

Coming shortly after a 500 million euro capital increase – plus a 400 million euro convertible bond issued in April – the move smacks of opportunism. Pent-up wanderlust has pushed Tui shares up 41% so far this year. German carrier Deutsche Lufthansa (LHAG.DE) is considering a similar move, Reuters reported last month read more .

If Tui boss Friedrich Joussen does tap shareholders for the cash it is unlikely to be for the last time. Net debt of roughly 6.8 billion euros is over 4 times estimated EBITDA for 2022, even though the metric is projected to exceed pre-pandemic levels that year, according to Refinitiv data. That might send sun-loving shareholders scurrying for the shade. (By Christopher Thompson)

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