TUI Travel Raises $800 Million for Aquisitions

Europe’s biggest travel firm TUI Travel (TT.L), which recently went on a shopping spree in the U.S. grabbing up student tour operators stateside,  said it planned to raise $802 million to fund acquisitions through the issue of a convertible bond and new banking facilities.

The group added trading was in line with guidance given on Mar. 24, when it reported strong sales trends, and it remained well positioned to meet expectations for underlying operating profit for the year to Sept. 30.

That is despite the impact from the closure of much of northern Europe’s airspace because of a huge ash cloud following the eruption of an Icelandic volcano. [ID:nLDE63I2FA]

The group, in which Germany’s TUI AG (TUIGn.DE) has a controlling stake of 54.9 percent, said on Tuesday the fund-raising would ensure it was well placed to exploit a strong pipeline of opportunities.

“They’ve raised significant firepower,” said KBC Peel Hunt analyst Nick Batram. “They had been questioned about whether they had enough headroom to make reasonable acquisitions and this addresses that.”

TUI Travel said it was looking to expand in emerging markets such as Brazil, China, India and Russia, and buy high margin businesses in specialist sectors such as the UK student segment and global cruise destination services.