Dusseldorf A week after the presentation of Tui’s quarterly figures, the rating agency Moody’s on Wednesday drastically tightened the warnings of a credit default by the holiday provider by two levels. The tour operator’s business would remain shaken, warned its analyst Vitali Morgovski, if the shutdown by Corona should be eased in the next few weeks.
Even before the corona crisis in December, Moody’s had downgraded the Hannoveraner Group’s credit rating to “speculative” because the necessary investments no longer seemed to be covered by the operating cash flow.
After two further gradations, it has rated the creditworthiness with “Caa1” since Wednesday, which indicates a “substantial risk”. 27.8 percent of the companies that received this grade from “Moody’s” to be translated as “insufficient” showed payment defaults in the following twelve months.
The 1.8 billion euro emergency loan from the State Bank KfW, which was granted at the beginning of April with the approval of the house banks, does little to change the plight, according to Moody’s. Because the cash outflow caused by the sluggish business is expected to be between 3.5 and four billion euros this year.
For example, Tui had to pay down payments for canceled trips this year – at the end of March, Tui had 2.2 billion euros of this money on its balance sheet. In addition, there would be expensive health measures to boost the travel business again, consumer reluctance to spend, and possibly even a second wave of infections.
KfW can call credit
At the same time, a EUR 300 million bond will expire in October 2021. If Tui finds no refinancing for this, according to Moody’s, KfW can also call in its 1.8 billion loan, which will otherwise be granted until July 2022.
Tui boss Fritz Joussen is under considerable pressure. Last week he announced an austerity program that could kill up to 8,000 people. He also wants to sell cruise ships, hotels and planes in order to rent them back in return. The Hapag-Lloyd cruise line is to go to a joint venture with the US shipping company Royal Caribbean for 600 million euros.
On the other hand, sales of other parts of the company, which have been reported in some media in the past few days, are not planned, said a company spokesman. Regarding the rumors from the Berlin government district, according to which the group wants to apply again for a 1.7 billion euro aid loan, the head office in Hanover said: “No comment.”
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