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TUI Travel/TUI AG merger financing includes loan and bond plans
By Sara Rosenberg
New York, Sept. 15 TUI Travel and TUI AG have received a commitment for a 1.55 billion credit facility and a 600 million term loan, which is expected to be refinanced by the issuance of senior unsecured notes, in connection with their merger, according to a news release.
Citigroup Global Markets Ltd., J.P. Morgan Ltd. and UniCredit Bank AG are the arrangers on the debt.
The credit facility consists of a 375 million three year and nine month revolver and a 1.175 billion up to two-year backstop facility.
The company anticipates refinancing the backstop facility by increasing the new revolver to 1.55 billion.
Proceeds will be used to refinance TUI Travels existing revolver and for general corporate and working capital requirements.
Under the agreement, TUI Travel shareholders will receive per share 0.399 new TUI AG shares.
The merger is expected to result in existing TUI Travel shareholders owning 46% of the combined group and existing TUI AG shareholders owning 54% of the combined group on a fully- diluted basis.
Based on the exchange ratio and the closing share prices as at Sept. 12, the combined group would have a fully diluted equity value of about 6.5 billion.
TUI Travel is a West Sussex, United Kingdom-based leisure travel group. TUI AG is a Hannover, Germany-based travel and tourism company. The merged company will be based in Germany.
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