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Alliance News

TUI AG Reduces Stake In TUI Russia And CIS Joint Venture

Fri, 23rd Oct 2015 14:23

LONDON (Alliance News) - TUI AG Friday said it will reduce its equity participation in TUI Russia and CIS, its joint venture with SeverGroup, to 25% from 49%.

The travel company said that shareholder loans and bank guarantees made previously to the joint venture have been restructured to reflect the new equity participation ratios, and both TUI and SeverGroup will provide new equity investment in line with the new participation ratios.

TUI will provide new equity investment of USD3.0 million, while certain payables by the joint venture to TUI businesses will be deferred to provide short-term financing of up to USD4.9 million for the winter 2015-16 season.

"Given the ongoing challenging trading environment for tour operators located in the Russian and Ukrainian source markets these arrangements are prudent as we enter into the off-peak Winter period," TUI said in a statement.

SeverGroup will increase its equity participation to 75%. The company is wholly-owned and controlled by Russian businessman Alexey Mordashov, who owns approximately 13% of TUI and who is therefore considered to be a related party.

Shares in TUI were trading down 0.3% at 1,212.00 pence Friday afternoon.

By Karolina Kaminska; @KarolinaAllNews

Copyright 2015 Alliance News Limited. All Rights Reserved.

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