TUI has decided to take advantage of the bankruptcy of FTI, until now a major investor in the south of Gran Canaria, to confirm this Monday that it has issued convertible bonds worth 487 million euros to buy back old debt and reduce its burden. These measures are aimed at reducing interest costs and improving the company's financial stability, which analysts consider positive.
They are convertible bonds with a term of seven years to repurchase old bonds. This measure is intended to complete the refinancing of the credit line of the state development bank KfW and reduce the company's debt burden. TUI said in June that prices would not change much and would, on average, remain at a comparable level.
By buying back the old bonds due 2028, TUI aims to reduce the existing debt by approximately 80% of the outstanding nominal amount of €589,6 million. The new convertible bonds maturing in 2031 have an initial conversion price of 9,60 euros and an annual interest rate of 1,95 percent. This financial strategy aims to significantly reduce interest costs and extend the company's maturity profile.
The TUI Group was founded in 1923 and is headquartered in Berlin and Hanover. Before changing its name in 2002, it operated as a conglomerate called Preussag AG and was involved in mining rather than tourism. TUI, whose logo represents the three letters of the company's signature smile, stands for 'Touristik Union International'.
