On Monday, 4 January, the European Commission approved Germany’s plan to contribute up to a maximum of €1.25 billion to the recapitalisation of TUI AG (TUI) as part of a wider support package. This measure was approved under the Temporary Framework for State aid measures in the context of Covid-19.
Margrethe Vestager, the executive vice-president in charge of competition policy, declared that the State will be sufficiently remunerated within the framework of this aid for the risk borne by taxpayers. She welcomed private investors’ participation in the project, which reduces the need for State aid, while contributing to TUI’s recovery.
TUI is a large German leisure tourism group that operates in several Member States. It is currently facing a risk of default and insolvency.
Germany sent notification of a State recapitalisation of TUI up to a maximum of €1.25 billion.
According to the European Commission, the measure will not exceed the minimum needed to ensure TUI’s viability.
Germany committed to developing a credible exit strategy within 12 months of the aid being granted, unless the State’s intervention has been reduced to below 25% of equity by that time. If the State’s intervention has not been reduced to less than 15% of TUI’s overall equity 6 years after receiving the recapitalisation aid, the European Commission will be notified of a restructuring plan for the company. Moreover, until the State’s equity investment has been repaid in full, TUI and its subsidiaries will not be able to distribute dividends or repurchase shares if these operations are not related to the State. Until at least 75% of the recapitalisation has been redeemed, strict limits will be applied to TUI’s management remuneration, including a ban on paying bonuses. (Original version in French by Lionel Changeur)