Tui share: debt reduction & “business running very well operationally”

TUI stock (WKN: TUAG00) continues to leave much to be desired in terms of share price performance. The bottom line is that a multi-year low has recently been formed. Once again, this shows that investors are skeptical about future prospects. Whereas skepticism is now also present in the broad market.

Now, however, there is something operational to report from TUI stock. The management had reduced liabilities as planned. At the same time, management is apparently talking about a business that is doing very well. Let's have a look at the details, which should be known to Foolish investors.

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TUI stock: credit & business

As it is said on the part of TUI, to the 30. June Silent partnership II repaid by the German government to the economic stabilization fund. That had happened from the capital increase in May. In the end, it's really just taking stock or putting into action the plans we as investors already knew about.

But it goes further. In fact, the management of the TUI share has reduced the amount of a previously undrawn credit line at the same time. 2.4 billion. Euro previously to 2.1 billion. Euro decreased. In this respect, we can say: Yes, management is optimistic about its own financial situation. But the rationale for the last step is critical.

For example, management talks about having reduced the credit line because of very good operating business. Hm, that doesn't sound so bad with regard to the TUI share if you ask me.

What does it mean?

It's not big news. As I said, the bottom line is that with TUI stock, we already knew that management was paying back the silent partnership contribution of the economic fund. In this respect, the news content is rather low. To reduce the volume of the previous credit line is also fundamentally not decisive. It simply shows that the management is so optimistic that these additional funds, if any, are not needed.

But context is key: TUI stock management is more optimistic and able to repay deposits. If the travel group is in better shape balance sheet-wise, that could mean a revaluation. But it is still a little way until then.

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