TUI eyes capital raise after swinging back to profit

TUI, the world's largest holiday company, said it planned to repay COVID-19 support through a capital raising next year after a strong summer helped it swing back to profit and it forecast a "solid" 2023. Germany-based TUI, which operates holidays, hotels, cruise ships and an airline said it would start to cut its dependence on the German state, whose help enabled the group to survive the pandemic. CFO Mathias Kiep said TUI would need to raise between E1.6b and 1.8b through a capital raise to start repaying its German loans. That news weighed on its shares. The stock dropped 6% to 138 pence in morning trading, paring gains made over the last month. It has already lost 40% of its value in 2022. "The extent of potential equity dilution will depend on prevailing appetite and share price," said Stifel analysts, noting that sanctioned Russian shareholder Alexei Mordashov cannot participate in any rights issue. TUI said 2023 would be solid and it guided to a significant increase in earnings. For the year to end-September, TUI on Wednesday posted underlying earnings of E409m, compared to a E2b loss the previous year. Bookings for next year were stable and average prices higher, TUI said, adding that it was aware of the difficult economic outlook.<br/>