TUI has received the approval of the German government for a bridging loan of EUR 1.8 billion (USD 1.98 billion) from the KfW. The funds of Germany’s state-owned development bank are to be used to increase TUI’s existing credit line with its banks amounting to EUR 1.75 billion (USD 1.93 billion).
The bridge loan is subject to the approval of the banks. One of the conditions of the KfW bridge loan is that TUI waives dividend payments for the duration of the bridge loan.
Fritz Joussen, chief executive of TUI Group said: “The commitment of the KfW bridge loan is an important first step for TUI to successfully bridge the current exceptional situation. Our thanks go to the German federal government, the German parliament, the government of Lower Saxony and KfW. They have acted quickly and in solution-oriented manner in the interest of our customers, employees and the company.”
The company had decided to apply for the KfW bridging loan to cushion the unprecedented effects of the Covid-19 pandemic until normal business operations could be resumed. Following travel restrictions and travel warnings from almost all countries, the group decided to suspend touristic offers in mid-March, including packaged tours, cruises, and hotel operations, until further notice.