8th Apr 2020 08:34
(Alliance News) - Anglo-German tour operator TUI AG on Wednesday confirmed it has signed an agreement for a EUR1.8 billion loan from the German government to help keep it afloat as the coronavirus batters the travel industry, AFP reported.
The bridging loan equivalent to USD1.99 billion will be issued through German public lender KfW and be used to bolster TUI's credit line.
"KfW and TUI AG confirm the signing of the state aid bridging loan for EUR1.8 billion," the group said in a statement. TUI first had announced the loan commitment at the end of last month.
It is one of the biggest examples yet of German companies making use of a huge government rescue package aimed at cushioning the impact of the pandemic on Europe's top economy.
Global lockdowns to stem the spread of the virus have paralysed holiday travel, forcing TUI's hotels, flights and cruise ships to stay empty.
"We must bridge this unprecedented global situation," Chief Executive Officer Fritz Joussen said, recalling that TUI had started 2020 "with extremely strong bookings" before the virus struck.
"We are now preparing intensively for when our operations can resume after the coronavirus crisis and firmly believe, people will continue to want to travel and explore other countries and cultures in the future," he added.
TUI had earlier said that the state loan would be used to increase the group's credit line with its banks, giving it access to cash and available facilities of EUR3.1 billion.
The German government has promised "unlimited" credit to help companies weather the coronavirus storm.
TUI shares were up 6.9% early Wednesday in London at 393.00 pence but remain down almost 20% over the past month.
By Tom Waite; [email protected]
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