TUI secures 350m euros to cover debt
TUI AG has secured 350 million euros in financing to cover short term debt.
The travel group has raised the money by issuing bonds that mature in five years, securing it financing in the long term.
TUI says most of the capital raised from issuing bonds will go towards paying debt. A statement read: “The proceeds from the issue will primarily be used to refinance existing indebtedness, thereby extending the company’s debt maturity profile.”
Rival operator MyTravel also issued bonds to secure finance. The travel group’s refinancing plans rested on a recent vote which approved the extension of the bonds, giving the company access to £221.6 million of debt until January 2007.
Operators have faced a challenging summer due to the combined impacts of the war in Iraq, Sars and a hotter-than-average UK summer. Despite this, TUI says figures could be in line with, or better than last year.
The statement read: “…earnings in July and August were good and preliminary results for September are promising. This means, that there is a good chance for third quarter earnings before tax and goodwill amortisation (EBTA) to come close to previous year’s figures. Earnings for the fourth quarter are expected to be better than in the
previous year.”
TUI says bookings for winter 2003/2004 are currently up 4% on last year.
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