Re Joint Venture
15 Aprile 2009 - 9:00AM
UK Regulatory
TIDMTT.
RNS Number : 5834Q
TUI Travel PLC
15 April 2009
15 April 2009
TUI Travel PLC and S-Group Capital Management sign joint venture and acquisition
agreements for Russia and Ukraine
15 April 2009, TUI Travel PLC (TUI Travel) is pleased to announce that further
to the statement on 10 April 2008 that it was forming a joint venture with
S-Group Capital Management Limited, (S-Group), together with affiliated parties,
to develop its Russian and CIS leisure tourism presence, it has today signed a
definitive joint venture agreement to this effect. The joint venture can also
announce that they have agreed to acquire majority stakes in certain assets of
two key tour operators and travel agency groups in Russia and Ukraine. The joint
venture has also signed a letter of intent with Mostravel, a Turkey and Egypt
destination specialist.1
Highlights include:
* Signature of a definitive joint venture agreement between TUI Travel and S-Group
* Signature of an agreement for the subsequent purchase by the joint venture of:
*
* a 75% stake in certain assets of VKO Group, a tour operator and travel agency
group based in Russia
* a 75% stake in certain assets of Voyage Kiev, a tour operator and travel agency
group based in Ukraine
* Signature of a letter of intent by the joint venture to own a 75% controlling
stake in Mostravel, a Turkey and Egypt destination specialist based in Moscow.
The joint venture (to be owned 51% by S-Group and 49% by TUI Travel) will be an
investment holding company, financed proportionally by both parties. The joint
venture is expected to invest up to $40m by 31 December 2009, with TUI Travel
PLC's share of this investment expected to be up to $20m, either in cash or the
value of existing assets contributed to the joint venture.
The Russian and CIS leisure tourism markets have experienced significant growth
in outbound travel in recent years and present strong long-term growth
opportunities. In 2008, six million Russians and one million Ukrainians
travelled on traditional sun and beach holidays, which combined is equivalent to
a third of the size of the UK sun and beach charter market.
Commenting on the agreements Peter Long, Chief Executive of TUI Travel PLC,
said:
"TUI Travel will be the first major international tour operator with a
significant presence in Russia and CIS. We are delighted with our partnership
with S-Group which combines their local business knowledge and expertise with
our vast experience in leisure travel. The agreements with VKO, Voyage Kiev and
Mostravel will provide us with the scale and expertise to make a large impact on
these markets."
Vladimir Yakushev, Managing Partner, S-Group Capital Management said:
"We are delighted to be a partner of the leading European tour operator and are
excited about the growth potential in the tourism markets in Russia and CIS.
These deals start consolidating the market and will help to introduce market
leading practices which will enable customers in Russia and Ukraine to enjoy
high international tourism standards."
Enquiries:
+-----------------------------------------------------+------------------------+
| TUI Travel PLC | |
+-----------------------------------------------------+------------------------+
| David Paterson, Head of Strategy & Investor | Tel: +44 1293 645 795 |
| Relations | |
+-----------------------------------------------------+------------------------+
| Lesley Allan, Corporate Communications Director | Tel: +44 1293 645 773 |
+-----------------------------------------------------+------------------------+
| Michelle Jeffery, External Communications | Tel: +44 1293 645 776 |
+-----------------------------------------------------+------------------------+
| Michael Sandler/Kate Hough, Hudson Sandler Public | Tel: +44 20 7796 4133 |
| Relations | |
+-----------------------------------------------------+------------------------+
| S-Group Capital Management | |
+-----------------------------------------------------+------------------------+
| Luba Gurova, CNC | Tel: +7 985 920 1368 |
+-----------------------------------------------------+------------------------+
Further transaction details
Details of the joint venture
The joint venture is an investment holding company with the business being
managed on a portfolio basis as it grows. The Board of the joint venture will
consist of one member nominated by TUI Travel and one member nominated by
S-Group. Any material investments by the joint venture will be subject to
approval by the Board of the joint venture and prior approval of the two
shareholders. TUI Travel will also comply with Listing Rules 10 and 11 to the
extent relevant and/or necessary in respect of investments made by the joint
venture.
Company details
VKO Group, which was founded in Moscow in 1994, includes two tour operators VKO
Travel and Travelland as well as the network of travel agencies VKO Club which
has more than 100 offices across Russia. VKO Group was founded by Ellada
Peskova, Kirill Peskov and Natalia Golovlenkova, all of whom will remain with
the business and continue with its development.
VKO Group with revenues of $208m in the year to 31 December 2008, carries over
160k passengers per annum to a wide range of destinations, over 20 of which are
the main destinations covered by the group's tour operators, VKO Travel and
Travelland. The main destinations of VKO Travel are Spain, Greece, Croatia and
Bulgaria. In addition the company also provides leading ski products. Travelland
is predominantly a specialist tour operator focusing on the Czech Republic.
The gross assets2 to be acquired from VKO Group were $1.3m as at 31 March 2009.
Voyage Kiev is a tour operator and travel agency group based in Kiev. Founded in
1997 it includes the tour operator brand, Voyage Kiev and the travel agency
brand Galopom po Evropah. It is managed by Vladimir Shchupak, Tatiana Shchupak
and Taras Demura, all of whom will remain with the business and continue with
its development.
Voyage Kiev with revenues of $66m in the year to 31 December 2008, carries circa
70k passengers per annum to a wide range of destinations (20+) including Spain,
Egypt, Turkey, France and Croatia. Galopom po Evropah has 60 travel agencies
operating across Ukraine.
The gross assets1 to be acquired from Voyage Kiev were $102k as at 31 March
2009.
Mostravel with revenues of $384m in the year to 31 December 2008, is a Turkey &
Egypt specialist carrying circa 400k passengers per annum. As part of the
agreement TUI Travel PLC's existing 34% shareholding in Mostravel (which TUI AG
acquired in 2004) will be transferred into the joint venture. A further 41% of
Mostravel will be acquired by the joint venture subsequently giving the joint
venture a 75% controlling stake.
1 The formation of the joint venture and its subsequent acquisitions are all
subject to regulatory and competition authority approvals and confirmations.
2 Gross assets represent the sum of the fixed and current assets being acquired
and is not representative of the transaction consideration.
About TUI Travel PLC:
TUI Travel PLC is a leading international leisure travel group which operates in
approximately 180 countries worldwide and serves more than 30 million customers
in over 25 source markets. Headquartered in Crawley, near Gatwick airport in the
UK, the Group employs approximately 50,000 people and operates a pan-European
airline consisting of over 150 aircraft. The company mainly serves the leisure
travel customer and is organised and managed through four business Sectors:
Mainstream, Specialist & Emerging Markets, Activity and Online Destination
Services. In the financial year ended 30 September 2008, TUI Travel had revenues
of GBP13.9 billion and an underlying profit before tax of GBP320 million. For
more information visit www.tuitravelplc.com
About S-Group Capital Management Limited:
S-Group Capital Management is backed by Alexey Mordashov, CEO and major
shareholder of Severstal Group. S-Group Capital Management considers a wide
variety of investment opportunities ranging from venture capital investments in
high technology companies to developing strategic partnerships with
international conglomerates in Russia. Geography of investments includes Russia,
US and Europe.
Alexey Mordashov is a prominent Russian businessman. Among other positions he is
the CEO and major shareholder of OAO Severstal, an international, vertically
integrated steel producer with a listing on the Russian Trading System and the
London Stock Exchange. Severstal's high-quality assets are located in Russia,
Ukraine, Kazakhstan, United Kingdom, France, Italy and the United States. In
2008, Severstal produced 19.2 million tons of steel. Revenues were $22.4 billion
and EBITDA was $5.4 billion.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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