TUI, the world’s largest holidays operator, says it is considering selling off parts of its business to bring down debt as it navigates the coronavirus crisis.
The firm, which announced last month that it was to shut 166 high street stores across the UK and Ireland as part of a massive cost-cutting drive, reported a £1.3bn loss in the three months to June.
Revenues in the period came in at just £67.8m compared to £4.2bn in the same period last year.
Image: TUI wants to save hundreds of millions of pounds per year across its business
TUI revealed its third quarter figures just 24 hours after it announced a second credit line, with the German government, taking its war chest of available cash to £2.2bn.
Chief Executive Fritz Joussen said he did not know yet whether TUI would need the extra money but the company wanted to be prepared for the worst-case scenario as holiday plans continue to be disrupted by measures to contain coronavirus.
He told reporters that a rights issue, raising money from investors, was among the company’s other options to potential business sales but it was too early to say how much more cash, if any, would be needed.
He added that any divestments would not be distressed or forced sales.
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London-listed shares, more than 60% down in the year to date, fell 6% early on Thursday but later recovered half that loss.
TUI’s UK boss calls for ‘nuanced’ quarantine policy
That was despite the company expressing optimism on the market beyond 2020 – with summer bookings for next year up 145% on current levels – depressed by consumer caution in the current market.
TUI took the decision in July to cancel thousands of holidays to mainland Spain after the UK government imposed a 14-day quarantine on all people returning to the UK from across the sun-soaked country.
Neil Wilson, chief markets analyst at Markets.com, said of the company’s performance: “It’s a total wipe-out of earnings, but it’s not a surprise – the business was at a virtual standstill for most of the period and was only able to resume some limited operations from mid-May.
“Just 15% of hotels reopened in the quarter, whilst all three cruise lines remain suspended.”
Source : Sky News