TUI to pump millions into Russian joint venture
TUI Travel is to pump a further £15.3 million into its Russian joint venture, which has been hit by tough trading conditions.
The UK operator will also provide a new guarantee of £3 million for its TUI Russia and CIS joint venture with S-Group, which was set up five years ago.
"Given the ongoing challenging trading environment for tour operators located in the Russian and Ukrainian source markets the above arrangements are prudent as we enter into the off-peak Winter period," it said in a statement.
Earlier this month, the firm said it was cutting the number of holidays it offers to Russian customers by 30% after the devaluation of the ruble prevented it from raising prices.
It also said it had made a provision of £27 million pounds in the fourth quarter against loans made by its Russian venture.
The Russian joint venture is 49% owned by TUI and 51% owned by the S-Group, which is controlled by Russian businessman Alexei Mordashov, the largest shareholder of TUI AG.
TUI and the S-Group are believed to have invested around $40 million in the company which was set up in 2009 following a period of significant growth in outbound travel in Russia. At the time, six million Russians and one million Ukrainians took traditional sun and beach holidays.
TUI Travel is in the process of merging with its majority owner TUI AG to create the world’s biggest leisure and tourism group.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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