Can a Russian oligarch save the travel giant?

REUTERS / Fabian Bimmer

This Tuesday, the shareholders of Tui decided in an extraordinary general meeting on the planned capital increase by 500 million euros and additional funds. One man was particularly in focus, even if he did not appear and was hardly mentioned: Alexej Mordaschow.

The Russian oligarch is a major shareholder in Tui through the Unifirm Limited group of companies. In the course of the crisis in the travel group, he now wants to increase his shares from 24.9 to 36 percent. The decision by the financial regulator BaFin to exempt the billionaire from the mandatory offer to the other shareholders paved the way for this on Monday evening. “As a long-term strategic investor at Tui, I am confident that the business model will remain unchanged and that the company’s medium to long-term prospects are good,” he told the “Handelsblatt”.

Mordashov, who speaks good German, has been involved in the TUI since 2007. The 55-year-old is one of the richest Russians and, according to Forbes, is one of the 100 richest people in the world with a fortune of $ 23.4 billion (around 19 billion euros). The son of factory workers made his money with the steel company Severstal, which supplies car companies and machine manufacturers such as Siemens and Bosch.

Alexej Mordaschow has good connections to Germany

After the collapse of the Soviet Union and the subsequent wave of privatization in Russia, Mordashov took over shares in the steel company at the age of 27, which he still heads as chairman of the board. He is also involved in the gold company Nordgold and the energy company Power Machines. In the German economy he enjoys a reputation as a reliable partner, he is also Vice President of the German-Russian Chamber of Commerce (AHK). Allegedly, the oligarch only recently bought a luxury yacht from the Lürssen shipyard in Bremen.

His holding company Unifirm Limited, which is a quarter owned by Tui, is based in Cyprus and is indirectly controlled by the family members. Mordashov has six or seven children, depending on the source. According to “Handelsblatt”, he has already bequeathed part of his fortune to two of his children, the adult sons Kirill and Nikita, including shares in Tui.

But the corona crisis hit the travel industry hard. “Before the pandemic, Tui was a very healthy company,” said CEO Fritz Joussen at the virtual general meeting on Tuesday. In January 2020 the year started with a new booking record – then came Corona. “Due to the factual travel bans, we became a company with no product and no turnover practically overnight,” said Joussen. Return campaigns, cancellations and refunds then burdened the company. At the end of September, the loss for the past financial year was over 3.1 billion euros. Sales fell from 18.9 billion to 7.9 billion euros.

Tui boss: participation of the Mordashov family in the capital increase is an “extremely good sign”

Tui tried to save himself with private and state aid. The travel company has now been awarded around 4.8 billion euros in support. The lion’s share is accounted for by loans that are processed by the federally owned development bank KfW or a consortium of several commercial banks. “The state lends money, but it doesn’t give gifts. The credit isn’t free, ”commented Joussen. The company has set itself the goal of reducing costs by 400 million euros, especially in the airline sector. Shortly before the shareholders’ meeting, the EU Commission approved German state aid of up to 1.25 billion euros on Monday evening.

Tui boss Joussen saw it as an “extremely good sign” that the Mordashov family has already promised to participate in the capital increase. The aid package for Tui also contains silent contributions from the state economic stabilization fund (WSF) of 700 million euros – of which the federal government could convert 420 million euros into shares and thus participate in Tui. The shareholders approved this right on Tuesday with a large majority. This paves the way for the federal government to enter Tui with a total of up to 25 percent plus one share – at this level it would also have a blocking minority and thus a say in other central decisions.

There is also a second, but not convertible, silent participation of up to 680 million euros. The exact exhaustion of this last part depends, among other things, on whether the state of Lower Saxony at the TUI headquarters in Hanover agrees to secure a sum of up to 400 million euros with its own guarantee. This is – like the question of state holdings in stock corporations in general – controversial, as was the case with Lufthansa and Commerzbank in the financial crisis after 2008.

Joussen expressed himself optimistically that Tui would return to normal after a “transitional year 2021” thanks to the vaccinations that have already started. “People want to travel, and the pandemic won’t change that,” he said. Tui has a healthy business model that had 27 million customers before the pandemic. The tourism sector remains a growth sector. “We see the light at the end of the tunnel.”

cm / dpa


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