connect with us
Greece's latest tourism industry news by Greek Travel Pages

EU Approves €1.25bn German State Aid for TUI

The European Commission has approved German plans to contribute with up to 1.25 billion euros to the recapitalization of TUI AG, the parent company of the TUI Group, as part of a wider support package.

The measure was approved under the State Aid Temporary Framework.

“Germany will contribute up to 1.25 billion euros to TUI’s recapitalization and help the company weather the crisis. At the same time, the state will be sufficiently remunerated for the risk taxpayers assume and the support will come with strings attached to limit distortions of competition. I welcome the participation by private investors to the plan, as it limits the need for state aid while contributing to the recovery of TUI,” said European Commission Executive Vice-President Margrethe Vestager, in charge of competition policy.

The recapitalisation comprises:

  • 420 million euros silent participation convertible into TUI’s equity
  • Up to 680 million euros non-convertible silent participation (400 million euros of which will only be provided in case the envisaged 400 million euros in guarantee measures is not provided by the Länder or the Federal government)
  • 150 million euros of convertible warrant bond.

The Commission found that the recapitalization measure notified by Germany is in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

TUI suffered substantial losses due to the coronavirus outbreak and the travel restrictions that Germany and other countries had to impose to limit the spread of the virus.

Despite the liquidity support measures already granted to the company by Germany in March and August 2020, the significant drop in travel demand and the measures implemented to limit the spread of the virus continue to deteriorate the financial situation of the group. As a result, TUI is currently facing a risk of default and insolvency.

Follow GTP Headlines on Google News to keep up to date with all the latest on tourism and travel in Greece.
About the Author
This is the team byline for GTP. The copyrights for these articles are owned by GTP. They may not be redistributed without the permission of the owner.

Add your comment