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Travel giant TUI gets third German bailout in US$2.2b deal
[BERLIN] TUI, the world's biggest tour operator, will receive US$2.2 billion in bailout funds after securing a third tranche of aid from the German government, together with cash from private investors.
The funding will comprise 1.3 billion euros (S$2.1 billion) from the state, via federal rescue fund WSF and state run KfW bank, together with 500 million euros through a capital increase, Hanover-based TUI said in a statement onWednesday.
TUI appealed for additional aid after a new wave of virus lockdowns in Europe wiped out a hoped-for surge in late summer travel while stunting bookings for winter getaways and ski breaks. The bailout, which extends rescue funds to 4.8 billion euros, was delayed by a debate over what conditions the state should attach, especially in relation to 8,000 planned job cuts.
TUI was already Germany's second-biggest coronavirus-bailout recipient, topped only by Deutsche Lufthansa. Companies spanning sportswear producer Adidas to forklift maker Kion Group have already paid back aid or are in the process of doing so.
While the imminent start of Covid-19 vaccine distribution is positive for TUI, people are booking far later for vacations in response to ever-changing travel curbs, delaying revenue flows. It has also re-booked many customers from the summer just gone, from whom it won't be getting extra cash.