TUI AG (TUI) TUI provides a Q4 post-close trading update and announces further strengthening of its balance sheet via fully underwritten EUR1.1bn capital increase 06-Oct-2021 / 07:02 CET/CEST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPEC-TUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW SHARES OR OTHER SECURITIES. NEITHER THIS COMMUNICATION NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS OR THE INTERNATIONAL OFFERING CIRCULAR.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION CONCERNING ANY INVESTOR'S DECI-SION OR OPTIONS WITH RESPECT TO THE OFFERING (AS DEFINED BELOW). THE PRICE AND VALUE OF SE-CURITIES OF THE COMPANY CAN GO DOWN AS WELL AS UP. PAST PERFORMANCE IS NOT A GUIDE TO FU-TURE PERFORMANCE. THE CONTENTS OF THIS ANNOUNCEMENT ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH SHAREHOLDER OR PROSPECTIVE INVESTOR SHOULD CON-SULT HIS, HER OR ITS OWN INDEPENDENT LEGAL ADVISER, BUSINESS ADVISER, FINANCIAL ADVISER OR TAX ADVISER FOR LEGAL, FINANCIAL, BUSINESS OR TAX ADVICE.

Hanover, 6. October 2021.

TUI AG ("TUI" or the "Company", and, together with its consolidated subsidiaries, the "Group")

TUI provides a Q4 post-close trading update and announces further strengthening of its balance sheet via fully underwritten EUR1.1bn capital increase

Prior to entering its close period ahead of reporting its full year results for the twelve months ending 30 September 2021 in December, TUI Group announces the following update.

Latest Trends and Highlights

-- Overall Summer 21 programme1 totals 5.2m bookings, an increase of c.1.1m since Q3 update

-- Over 2.6m customers have taken a TUI holiday during July & August (FY20 Jul & Aug: 1.3m customers)

-- Summer 21 bookings in Germany and the Netherlands well ahead of Summer 19 levels in recent weeks

-- Capacity plans for peak Summer period (July to October) flexed to between 50%-60% due to subdued UKbookings

-- UK Winter 21/22 bookings1 trending strongly since UK Government travel update on 17 September

-- As of 4 October 2021, the Group's total cash and available facilities amounts to EUR3.4bn

-- Following the completion of the capital increase, cash and available facilities will increase by c.EUR1.1bnto EUR4.5bn

-- Drawings under c.EUR3.0bn KfW RCF facilities reduced to EUR375m as at 4 October 2021

1These statistics are up to 3 October 2021, shown on a constant currency basis and relate to all customers whether risk or non-risk

Capital Increase

The Executive Board of TUI resolved today, with the consent of the Supervisory Board of the Company, to launch a fully underwritten capital increase with subscription rights (the "Subscription Rights) to raise gross proceeds of c.EUR1.1bn (the "Rights Issue" or the "Offering").

523,520,778 new ordinary registered shares with no par value of the Company (the "New Shares") will be offered at a subscription ratio of 10:21 (10 New Shares for every 21 existing shares). The Subscription Price of EUR2.15 per New Share represents a discount to TERP (theoretical ex-rights price) of 35.1%.

TUI's largest shareholder, Unifirm Limited ("Unifirm"), with a 32.0% holding in the Company, has undertaken to exercise all Subscription Rights attributable to its shareholding at the Subscription Price and to subscribe directly for these New Shares (the "Unifirm Commitment").

Unifirm has also undertaken not to dispose, sell or transfer (i) any of its existing shares or (ii) any of its Subscription Rights or any New Shares acquired pursuant to the Unifirm Commitment until the final settlement of the Offering or 16 November 2021, whichever is the latest.

Transaction Highlights

-- c.EUR1.1bn capital increase to strengthen the balance sheet further - maximise long-term opportunities

-- Less than 12 months since the last support package, successfully reduced drawings of the c.EUR3bn2 KfWfacilities to below EUR0.4bn

-- Capital increase would reduce RCF KfW drawings to zero (plus reduce RCF Banks drawings)

-- Convertible tap, RIU entity disposal and offering proceeds, combined with a better than expectedcash-flow in Q4, result in:? a pro-forma gross debt reduction from EUR8.7bn3 to c.EUR6.5bn and ? a strong financial headroom of c.EUR4.5bn

-- All financial measures are important steps towards returning to gross leverage ratio of around 3x

2 KfW facilities consisting of Unsecured RCF EUR2.85bn and secured RCF EUR170m (reduced by EUR30m from EUR200m to EUR170m on 30 September 2021) = EUR3.02bn

3 Financial liabilities incl. lease liabilities of EUR7.9bn plus EUR0.8bn net pension obligation

TUI Investment Case Highlights

-- A Market leader with a strong brand:? strategically well-positioned within the growing tourism market (>GDP); and ? to benefit from strong rebound post pandemic crisis

-- Integrated business model - unique holiday experiences helping to create moments for our customers thatmake life richer

-- Pioneering sustainable tourism - driving positive change for people and communities

-- Digital transformation and Global Realignment Programme of c.EUR400m - emerge leaner post Covid-19

-- Strong pipeline of Summer 2021 and Winter 2021/22 bookings - demonstrate clear appetite and pent-updemand for TUI holidays

Use of Proceeds

The Company intends to use the net proceeds of the Offering to reduce interest costs and net debt by reducing current drawings 1. Under the KfW Facility, under which as at 4 October 2021, the latest practicable date prior to the dateof the Prospectuses, the Company had drawn EUR375.0 million, and 2. Under the Cash Facility, under which as at 4 October 2021, the latest practicable date prior to the dateof the Prospectuses, the Company had drawn EUR1,486.5 million.

As a result, taking into account the expected net proceeds of the Offering of around EUR1,099.5 million, the current drawings under the KfW Facility would be reduced by EUR375.0 million to zero and the current drawings under the Cash Facility would be reduced by the remaining net proceeds of EUR724.5 million to EUR762.0 million.

Friedrich Joussen, TUI Group CEO said:

"The Offering will enable us to take a significant step forward, increasing our ability to take advantage of the business opportunities resulting from the easing of Covid-19 restrictions. It will provide us with a capital structure more appropriate for more normal operating conditions."

Current Trading

Overall Summer 21 programme4 now totals 5.2m bookings, an increase of c.1.1m bookings since our August update. As anticipated, we have seen strong improving trends over recent weeks with bookings in Germany and the Netherlands in particular, well ahead of Summer 2019 levels. This reflects the higher level of confidence in departure in our Continental European markets with load factor improvement in the last two to three weeks before departure evident of the short-term booking trend and pent-up demand for our holidays. Over 2.6m customers departed for their TUI holidays during July and August, doubling the 1.3m customers who travelled in July and August last year.

For peak summer period to date (July to October), we have so far operated a capacity of 42% for July and 48% for August. In contrast to our Continental European markets, UK departures have remained largely subdued since our last update, with a nearly unchanged traffic light system limiting the return of popular destinations such as Turkey, Egypt and the Dominican Republic. As a result, we now expect to operate a capacity for peak summer period (July to October) of between c.50% and c.60%. Peak summer period bookings4 (July to October) are currently 49% of 2019 levels with ASP up 2% (overall Summer 2021 bookings4 are down 63% with ASP up 5% versus Summer 19).

The recent announcement on 17 September 2021 by the UK government to adopt a similar travel framework as our European markets is a clear step to further reopening international travel for our UK customers. With a very notable pick-up in UK bookings over the most recent weeks since the announcement, particularly for our Winter 2021/22 programme where we have seen UK daily bookings trending strongly, we are confident this will enable a stronger return for the UK market in the coming months.

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October 06, 2021 01:03 ET (05:03 GMT)