A&O Shearman advises TUI on issuance of convertible bonds as last step in refinancing of Covid-19 state aid

The initial conversion price was set at EUR9.60m, representing a conversion premium of 50% above the reference share price of EUR6.40m which was determined in the context of the delta placement of existing shares organized simultaneously by the joint global coordinators on behalf of certain subscribers of the convertible bonds. Shareholders' subscription rights were excluded. In the context of the transaction, TUI also submitted a repurchase offer to the holders of the outstanding convertible bond maturing in 2028.

Besides financing the repurchase offer, the issue proceeds are to be used to refinance the remaining KfW facility in order to further reduce this facility from currently EUR550m to around EUR210m, as contractually agreed, and to repay the remaining amount in the first half of calendar year 2025. In addition, the maturity profile is extended and interest costs are significantly reduced, which further strengthens TUI AG's capital structure.

The transaction marks the final refinancing measure to end the utilisation of state aid received in connection with the Covid-19 epidemic. Since 2021, A&O Shearman has advised TUI on equity capital markets transactions for the full refinancing of such state aid in an aggregate volume of approximately EUR4.3billion, as well as recently on TUI’s delisting from the London Stock Exchange and the listing in the Prime Standard segment of the Frankfurt Stock Exchange.  

The A&O Shearman team was led by partner Dr. Knut Sauer and counsel Nadine Kämper, who were supported by associate Patrick Reuter (all Frankfurt, all Capital Markets). Partner Jeff Hendrickson and associates Isidora Parga and Valerio Di Mascio (London, U.S. Corporate Finance) advised on U.S. law matters.

For more information please contact: Ayfer Ekingen, Frankfurt am Main, Tel: +49 69 2648 5840 (ayfer.ekingen@aoshearman.com)