Package tours giant Tui tapped the markets for up to €400 million (£347 million) on Friday as the Government proposed a "traffic light" system to potentially allow Britons to resume holidays abroad from May 17.
Europe's largest travel company said it is to raise €350 million (£304 million) via a convertible bond, with the option to for a further €50 million (£43 million). It will sell senior unsecured convertible bonds due in 2028, which will come with a hefty interest rate of between 4.5% and 5% per year, payable semi-annually in arrears.
The Germany-based group, which lost €3 billion (£2.7 billion) last year after being devastated by Covid travel bans and lockdowns, said it "intends to use the proceeds... to further improve its liquidity position as the Covid-19 crisis continues, and subsequently for the repayment of existing financing instruments".
Tui has slashed around a third of its workforce since the pandemic hit, has received bailouts from the German government and recently brought in cost-cutting measures that will strip the business of a further €100 million in costs.
Underthe government’s proposed plans, countries would be rated green, amber and red, with high-vaccine rate destinations such as Israel and Malta likely to be on the "green list".
But whatever their destination, tourists will have to pay as much as £100 after their return for one or more Covid-19 PCR tests, and travel industry leaders have warned this could deter holidaymakers.
Shares in Tui were down 6% in early trading.