Convertible Bond And Additional Bank Facilities
20 Aprile 2010 - 8:05AM
UK Regulatory
TIDMTT.
RNS Number : 4486K
TUI Travel PLC
20 April 2010
20 April 2010
TUI TRAVEL PLC
("TUI Travel" or the "Group")
TUI TRAVEL - CONVERTIBLE BOND AND ADDITIONAL BANK FACILITIES
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (OR
TO US PERSONS), CANADA, JAPAN, JERSEY, AUSTRALIA OR IN ANY OTHER JURISDICTION IN
WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW
TUI Travel announces that it intends to raise approximately GBP500 million of
new financing through a convertible bond and additional bank facilities to:
+-------+-----------------------------------------------------------+
| · | Ensure the Group is well placed to exploit its strong |
| | pipeline of attractive acquisition opportunities; and |
+-------+-----------------------------------------------------------+
| · | Extend and diversify its debt maturity profile and |
| | broaden its sources of finance; and |
+-------+-----------------------------------------------------------+
| · | Take advantage of current favourable convertible bond |
| | market conditions and build on the success of its debut |
| | convertible bond issue in October 2009 and reduce the |
| | need to refinance all of the existing banking facilities |
| | in the future (due in June 2012). |
+-------+-----------------------------------------------------------+
The Group confirms that underlying trading is in line with its previous trading
statement issued on 24 March 2010, when it reported strong trading trends and
reiterated that the Group remains well positioned to meet the Board's
expectations for underlying operating profit for the year ending 30 September
2010.
As announced on 19 April 2010, TUI Travel has been affected by the closure of
much of Northern Europe's airspace since 15 April 2010, caused by volcanic dust
in the atmosphere. The estimated cumulative cost to the Group, up to and
including 19 April 2010, is circa GBP26 million. Estimated daily costs
thereafter are expected to run at approximately GBP5 million to GBP6 million.
These costs are one-off in nature and will be disclosed accordingly.
In the UK, most customers who were due to go on holiday, and whose flights have
been cancelled, are choosing to re-book their holidays for a later date. Also,
trading has remained robust despite the closure of UK airspace, with booking
volumes since 15 April 2010 well ahead of the same period in the prior year
(excluding the impact of re-booking of cancelled flights).
The Group is pleased to note actions being taken by governments to open airspace
and many operations will resume today.
Convertible bond issue
Following the successful issue in October 2009, TUI Travel intends to offer
approximately GBP350 million of senior unsecured convertible bonds due 2017 (the
"Convertible Bonds") to investors (the "Offering") which will be convertible
into fully paid ordinary shares of TUI Travel (the "Shares").
It is TUI Travel's intention that eligible existing institutional shareholders
will be given the opportunity to take up their pro rata allocation as part of
the bookbuilding process if they so wish.
TUI AG, the Group's majority shareholder which holds or controls 54.9 per cent
of the outstanding issued Shares in TUI Travel, will participate in the Offering
to prevent potential dilution of its majority shareholding by subscribing for 50
per cent of the Convertible Bonds on offer at the issue price. Furthermore, TUI
AG intends subsequently to convert the Bonds it holds at the same time, and in
the same proportion as any third party conversions to prevent dilution. On this
basis, TUI AG has agreed to waive its right under the Relationship Agreement of
June 2007 to be offered new Shares to protect it from the potential dilution of
its shareholding through the issue of the Convertible Bonds.
At the target issue size of GBP350 million, the Convertible Bonds will be
convertible into approximately 8 per cent of the outstanding issued share
capital of TUI Travel.
Summary of the expected key terms:
+------------------------+-----------------------------------+
| Size | c. GBP350m |
+------------------------+-----------------------------------+
| Maturity | April 2017 |
+------------------------+-----------------------------------+
| Coupon | 4.75 to 5.5 per cent |
+------------------------+-----------------------------------+
| Conversion Premium | 30 to 35 per cent above reference |
| | share price |
+------------------------+-----------------------------------+
| Investor Put Option | 5.5 years |
+------------------------+-----------------------------------+
| Issuer Call Option | After 4 years subject to 130 per |
| | cent trigger1 |
+------------------------+-----------------------------------+
| Dividend Protection | Partial |
+------------------------+-----------------------------------+
1 of conversion price
Additional bank facilities
TUI Travel has received commitments to provide additional revolving credit
facilities of GBP150 million, maturing in June 2012. The interest cost on the
facilities is LIBOR plus 275 basis points on drawn amounts. TUI Travel's
available revolving credit facilities now total GBP1,060 million.
Repayment schedule of the shareholder loan
The repayment of the shareholder loan from TUI AG was re-scheduled on 29
September 2009. The shareholder loan currently amounts to approximately GBP600
million and is due for repayment in two further instalments, one of
approximately GBP450 million on 1 December 2010 and the final balance on 30
April 2011.
Acquisition strategy
The financing announced today leaves the Group well placed to build on its
successful acquisition track record. Our acquisition strategy is focused on
'bolt-on' acquisitions of high growth, high margin businesses in the specialist
sectors, strengthening our existing emerging markets presence and on value-added
mainstream acquisitions, such as consolidation of fragmented markets. In the
specialist sectors, we are currently seeing opportunities to consolidate our
position in the UK student segment and in global cruise destination services.
Since the creation of TUI Travel in September 2007 we have spent c.GBP210
million on 45 acquisitions and joint ventures and we currently have a strong
pipeline of attractive opportunities totalling over GBP100 million.
Enquiries:
+----------------------------------------+--------------------+
| TUI Travel | |
| Paul Bowtell, Chief Financial Officer | +44 (0) 1293 645 |
| Andy Jones, Director of Finance & | 713 |
| Investor Relations | +44 (0) 1293 645 |
| Paul Rushton, Head of Investor | 795 |
| Relations | +44 (0) 1293 645 |
| Lesley Allan, Corporate Communications | 795 |
| Director | +44 (0) 1293 645 |
| | 773 |
| | |
+----------------------------------------+--------------------+
| Deutsche Bank | |
| Simon Roue / Charles Wilkinson / | +44 (0) 207 545 |
| Mumtaz Naseem | 8000 |
| | |
+----------------------------------------+--------------------+
| RBS Hoare Govett | |
| Julian Hall / Neil Collingridge / Hugo | +44 (0) 207 678 |
| Fisher | 8000 |
| | |
+----------------------------------------+--------------------+
| Lazard | +44 (0) 207 187 |
| Nicholas Shott / Cyrus Kapadia / Vasco | 2000 |
| Litchfield | |
| | |
+----------------------------------------+--------------------+
| Barclays Capital | |
| Simon Ollerenshaw / Nick Smith / Axel | +44 (0) 207 623 |
| Huck | 2323 |
| | |
+----------------------------------------+--------------------+
| Citibank | |
| Ken Robins / Melvin Goergen | +44 (0) 207 986 |
| | 3366 |
| | |
+----------------------------------------+--------------------+
| Commerzbank | |
| Zaheen Osman / Jens Giersberg | +44 (0) 207 475 |
| | 0520 |
+----------------------------------------+--------------------+
| ING | |
| Kim Balt / Bart Jan Le Noble / Nigel | +31 20 563 8979 |
| van Putten | |
+----------------------------------------+--------------------+
| Hudson Sandler | |
| Michael Sandler / Kate Hough | +44 (0) 207 796 |
| | 4133 |
| | |
+----------------------------------------+--------------------+
Further information on the Convertible Bonds
The Convertible Bonds will be issued at 100 per cent of their principal amount
and unless previously redeemed, converted or purchased and cancelled, will
mature on the seventh anniversary of the issue of the Convertible Bonds in 2017.
TUI Travel will have the option to call the Convertible Bonds after four years
from issuance at their principal amount, together with accrued interest, if the
market price of the Shares deliverable on conversion of the Convertible Bonds
would exceed 130 per cent of the principal amount of the Convertible Bonds over
a specified period.
Holders will have the option to require TUI Travel to redeem the Convertible
Bonds at their principal amount, together with accrued interest, on the day
falling 5½ years from issuance.
The final size and final terms of the Offering will be determined at the time of
pricing (expected to be later today), with closing and settlement expected on or
about 27 April 2010.
The Convertible Bond issue is subject to an increase option of up to GBP50
million in line with common market practice and is targeting institutional
investors outside, inter alia, the United States.
The Convertible Bonds are expected to carry a coupon of between 4.75 and 5.5 per
cent per annum payable semi-annually in arrear, and the conversion price is
expected to be set at a premium of between 30 and 35 per cent to the volume
weighted average price of the Shares from launch to pricing.
A partial dividend protection schedule will be in place based on a 2010 full
year dividend of 11.0 pence per annum plus growth of 5 per cent per annum
thereafter for the remainder of the term of the Convertible Bonds.
TUI Travel has appointed Deutsche Bank AG, London Branch, RBS Hoare Govett
Limited, Barclays Bank PLC, Citigroup Global Markets Limited, Commerzbank AG and
ING Bank N.V. as joint bookrunners (the "Joint Bookrunners").
Deutsche Bank and Lazard acted as TUI Travel's financial advisors on this
transaction.
Application will be made for the Convertible Bonds to be admitted to listing on
the Official List of the UK Listing Authority and admitted to trading on the
Professional Securities Market of the London Stock Exchange.
General information
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES OR TO OR FOR THE ACCOUNT OF U.S. PERSONS (EACH AS DEFINED IN
REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED ("REGULATION S").
THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY
OFFER TO BUY CONVERTIBLE BONDS, NOR SHALL THERE BE ANY OFFER OF CONVERTIBLE
BONDS IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. THE
CONVERTIBLE BONDS OR OTHER SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT
BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OF U.S. PERSONS (EACH AS DEFINED IN REGULATION
S) ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THERE WILL BE NO PUBLIC OFFER OF THE CONVERTIBLE BONDS IN THE UNITED STATES. IN
ADDITION, THE CONVERTIBLE BONDS ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS AND MAY
NOT BE SOLD TO U.S. PERSONS.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY CONVERTIBLE BONDS.
THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED
KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO
INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS
ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), (II) HIGH NET WORTH
ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED
FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY
OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO
AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT MUST NOT BE READ, ACTED ON OR RELIED
ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT
ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. BY READING THIS
ANNOUNCEMENT, THE READER ACKNOWLEDGES THAT IT IS A PERSON EITHER (I) OUTSIDE THE
UNITED KINGDOM OR (II) FALLING WITHIN ONE OF THE FOREGOING CATEGORIES.
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA"), THIS ANNOUNCEMENT AND
ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED
INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE DIRECTIVE 2003/71/EC
(THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS") AND PURSUANT TO THE
RELEVANT IMPLEMENTING RULES AND REGULATIONS ADOPTED BY EACH RELEVANT MEMBER
STATE. ANY PERSON IN THE EEA OTHER THAN THE UNITED KINGDOM WHO ACQUIRES THE
CONVERTIBLE BONDS IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF
CONVERTIBLE BONDS IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT
IS A "QUALIFIED INVESTOR", (AS DEFINED ABOVE). ANY INVESTOR WILL ALSO BE DEEMED
TO HAVE REPRESENTED AND AGREED THAT (I) ANY CONVERTIBLE BONDS ACQUIRED BY IT IN
THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN
QUALIFIED INVESTORS, OR PERSONS IN THE UK AND OTHER MEMBER STATES (WHERE
EQUIVALENT LEGISLATION EXISTS) FOR WHOM THE INVESTOR HAS AUTHORITY TO MAKE
DECISIONS ON A WHOLLY DISCRETIONARY BASIS AND (II) THE CONVERTIBLE BONDS HAVE
NOT BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS
WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY TUI TRAVEL OR THE
JOINT BOOKRUNNERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS
DIRECTIVE. TUI TRAVEL, THE JOINT BOOKRUNNERS AND ANY OF THEIR RESPECTIVE
AFFILIATES, AND OTHERS, WILL RELY UPON THE TRUTH AND ACCURACY OF THE FOREGOING
REPRESENTATIONS AND AGREEMENTS.
THIS ANNOUNCEMENT IS NOT A SUMMARY OF THE OFFERING AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE OFFERING CIRCULAR TO BE PREPARED IN CONNECTION WITH
THE OFFERING (THE "OFFERING CIRCULAR"). THIS ANNOUNCEMENT DOES NOT PURPORT TO
IDENTIFY OR SUGGEST THE RISKS (DIRECT OR INDIRECT) WHICH MAY BE ASSOCIATED WITH
AN INVESTMENT IN THE CONVERTIBLE BONDS. EACH INVESTOR SHOULD READ THE OFFERING
CIRCULAR FOR MORE COMPLETE INFORMATION REGARDING THE CONVERTIBLE BONDS BEFORE
MAKING AN INVESTMENT DECISION.
THE JOINT BOOKRUNNERS ARE ACTING ON BEHALF OF TUI TRAVEL AND NO ONE ELSE IN
CONNECTION WITH THE CONVERTIBLE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER
PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE
JOINTBOOKRUNNERS, OR FOR PROVIDING ADVICE IN RELATION TO THE CONVERTIBLE BONDS.
NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS OR WILL BE MADE AS TO, OR
IN RELATION TO, AND NO RESPONSIBILITY OR LIABILITY IS OR WILL BE ACCEPTED BY THE
JOINT BOOKRUNNERS, OR BY ANY OF THEIR AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS
AS TO OR IN RELATION TO THE ACCURACY, COMPLETENESS OR VERIFICATION OF THIS
ANNOUNCEMENT, THE OFFERING CIRCULAR, PUBLICLY AVAILABLE INFORMATION ON TUI
TRAVEL OR ANY OTHER WRITTEN OR ORAL INFORMATION MADE AVAILABLE TO ANY INTERESTED
PARTY OR ITS ADVISERS AND ANY LIABILITY THEREFOR IS HEREBY EXPRESSLY DISCLAIMED.
IN CONNECTION WITH THE OFFERING, THE JOINT BOOKRUNNERS AND THEIR RESPECTIVE
AFFILIATES MAY, FOR THEIR OWN ACCOUNT, ENTER INTO ASSET SWAPS, CREDIT
DERIVATIVES OR OTHER DERIVATIVE TRANSACTIONS RELATING TO THE CONVERTIBLE BONDS
AND/OR THE UNDERLYING ORDINARY SHARES AT THE SAME TIME AS THE OFFER AND SALE OF
THE CONVERTIBLE BONDS OR IN SECONDARY MARKET TRANSACTIONS. THE JOINT BOOKRUNNERS
AND ANY OF THEIR RESPECTIVE AFFILIATES MAY FROM TIME TO TIME HOLD LONG OR SHORT
POSITIONS IN OR BUY AND SELL SUCH SECURITIES OR DERIVATIVES OR THE UNDERLYING
ORDINARY SHARES. NO DISCLOSURE WILL BE MADE OF ANY SUCH POSITIONS OTHER THAN AS
REQUIRED BY APPLICABLE LAWS AND DIRECTIVES.
IN CONNECTION WITH THE OFFERING, THE JOINT BOOKRUNNERS AND ANY OF THEIR
RESPECTIVE AFFILIATES ACTING AS AN INVESTOR FOR THEIR OWN ACCOUNT MAY TAKE UP
CONVERTIBLE BONDS OR THE UNDERLYING ORDINARY SHARES AND IN THAT CAPACITY MAY
RETAIN, PURCHASE OR SELL FOR THEIR OWN ACCOUNT SUCH SECURITIES AND ANY
SECURITIES OF TUI TRAVEL OR ANY RELATED INVESTMENTS AND MAY OFFER OR SELL SUCH
SECURITIES OR OTHER INVESTMENTS OTHERWISE THAN IN CONNECTION WITH THE OFFERING.
THE JOINT BOOKRUNNERS DO NOT INTEND TO DISCLOSE THE EXTENT OF ANY SUCH
INVESTMENT OR TRANSACTIONS OTHERWISE THAN IN ACCORDANCE WITH ANY LEGAL OR
REGULATORY OBLIGATION TO DO SO.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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