(New: Background on the capital increase, updated share prices.)

LONDON/FRANKFURT (dpa-AFX) - The shares of Tui are once again in focus at midweek. Because this Wednesday ended trading in the subscription rights from the latest capital increase of the travel group. With fresh 1.8 billion euros from investors, Tui wants to repay the rest of the billions of euros in state aid from the Corona crisis and significantly reduce its own debt burden. Group CEO Sebastian Ebel would prefer to put the money from current operations into expanding the company's vacation business instead of interest payments. But the plans have not been well received on the stock market so far.

By the close of trading at midday, the price of the subscription rights had plummeted by more than half to 0.85 euros - extending its bitter losing streak since trading began at the end of March. By comparison, Tui had originally set the price for the subscription rights at 5.55 euros.

On the London Stock Exchange, where the vast majority of the subscription rights and also the shares are traded, the price of Tui shares fell by one percent to 5.83 pounds at midday. With the start of the capital increase at the end of March, shares had slumped from prices around 14 pounds to below 6 pounds. At times, shares were trading at just 5.40 pounds.

One crux of the capital raising is the exclusion of long-time major Tui shareholder Alexei Mordashov, who continues to be attributed more than 30 percent of Tui shares. The Russian oligarch had played a major role in previous capital increases, helping to save the Group during the pandemic.

However, as a result of the Russian war of aggression against Ukraine, he is no longer allowed to invest in Tui. The EU had placed Mordashov on its sanctions list at the end of February 2022. According to voting rights notifications, he transferred the lion's share of his shares to his wife Marina Mordashova via an investment company. According to Tui, however, this transfer is "pending invalid" - because the German Federal Ministry of Economics initiated an investigation under the Foreign Trade and Payments Act just over a year ago.

Analyst Jamie Rollo from investment bank Morgan Stanley had advised the previous day to continue avoiding Tui shares. According to the expert, investors are likely to take the new papers rather badly. The result would be a large overhang of shares, which would put latent pressure on the price in the future. The sharp drop in the price of the subscription rights seems to prove him right in this respect.

Since the start of rights trading at the end of March, their price in Germany has been going up and down sharply. On the first day of trading on Xetra, their price rose from 5.55 euros to as much as 6.99 euros. It then slipped to less than one euro amid strong fluctuations. On the Thursday before the long Easter weekend, its price shot up again by almost 160 percent to 2.87 euros - on Tuesday, it fell again by around 35 percent. Every trading day, an average of almost seven million subscription rights changed hands in Xetra trading.

Tui's management tried to allay investors' concerns last week with the news that it would itself participate in the capital increase. Accordingly, the members of the Executive Board have exercised their subscription rights in full. Supervisory Board Chairman Dieter Zetsche subscribed to 8600 new shares, and he is already the largest shareholder of all members of the Executive Board and Supervisory Board, with around 28,800 shares.

According to the prospectus for the capital increase, trading in subscription rights on the Frankfurt and Hanover stock exchanges will end as early as midday. On the London Stock Exchange, however, the shares will be traded until the close of trading./bek/stw/men