TUI Travel PLC Pension Agreement and Refinancing (8276G)
18 Maggio 2011 - 12:06PM
UK Regulatory
TIDMTT.
RNS Number : 8276G
TUI Travel PLC
18 May 2011
TUI TRAVEL PLC PENSION AGREEMENT AND REFINANCING
18 May, 2011
Pensions update
Further to TUI Travel PLC's interim results on 10 May 2011,
which stated that it had reached agreement with trustees and unions
to cap the rate of future growth of pensionable pay for its UK
defined benefit pension schemes to a maximum of 2.5% per annum, TUI
Travel is pleased to announce that measures to address the ongoing
funding and management of the pension schemes have now been
finalised.
The agreed measures will bring total cash savings to TUI Travel
of GBP38 million per annum (including a GBP10 million reduction in
annual service costs and net of royalty payments) and a reduction
in forecast actuarial liability of GBP63 million.
On 31 May 2011, four of the current six schemes will merge and
the three remaining schemes have been provided with a limited
interest in a partnership established by TUI Travel PLC which holds
the Thomson and First Choice brands. Under the partnership
arrangements, TUI Travel commits to making payments of up to GBP275
million in 2026, if and to the extent that the pension schemes
remain in deficit at that time. In addition the partnership, which
will receive royalty payments from TUI UK for brand use, will make
annual income distributions to the pension schemes totalling circa
GBP16.5 million for 15 years until 2026.
The partnership's interest in the Thomson and First Choice
brands will provide collateral for these payments. All revenues,
profits and cash flows from the First Choice and Thomson businesses
will continue to be consolidated in the Group's accounts and TUI
Travel will retain day-to-day operational control of the brands.
The agreement will not impact the deficit calculated on an IAS 19
basis.
Refinancing
In addition on 17 May 2011, TUI Travel successfully refinanced
its banking facilities with the signing of new facilities totalling
GBP1.155bn. The new facilities have a four-year term and
substantially extend TUI Travel's debt maturity profile. Interest
will be incurred at a margin above LIBOR dependent on the
proportion of the facility drawn and it is envisaged that the
average margin will be less than 2%. The covenants remain
unchanged. The transaction was co-ordinated by the Royal Bank of
Scotland and involved a syndicate of banks.
Peter Long, Chief Executive, TUI Travel PLC, commented:
"We are delighted that we have reached agreement with the
Trustees of our UK defined pension schemes. This is a mutually
acceptable solution and an innovative scheme which mitigates the
Group's pension risk whilst increasing security for members'
pensions. We are also extremely pleased with the successful
refinancing and the continued strong support from our banking
partners."
Enquiries:
Analysts and Investors
Will Waggott, Chief Financial Officer Tel: +44 (0)1582
645 334
Paul Rushton, Director of Investor Relations Tel: +44 (0)1293
645 795
Press
Lesley Allan, Corporate Communications Tel: +44 (0)1293
Director 645 774
Michelle Jeffery, Corporate Communications Tel: +44 (0)1293
Manager 645 776
TUI Travel PLC is the world's leading international leisure
travel group operating in approximately 180 countries worldwide. It
serves more than 30 million customers in over 27 source markets.
Headquartered in the UK, the Group employs approximately 50,000
people and operates a pan-European airline consisting of 143
aircraft. The company is organised and managed through four
business Sectors: Mainstream, Specialist & Activity,
Accommodation & Destinations and Emerging Markets. In the
financial year ended 30 September 2010 TUI Travel had revenues of
GBP13.5bn and an underlying profit before tax of GBP447m. For more
information visit www.tuitravelplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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