Table of Contents
Key Points:
- FTI Group, majority-owned by Samih Sawiris, filed for bankruptcy due to severe financial strain from advance payment demands by suppliers.
- The bankruptcy is expected to disrupt thousands of summer vacation plans, with FTI canceling or partially fulfilling trips starting June 4.
- Germany’s Finance Ministry will review pandemic recovery aid given to FTI, but anticipates minimal recovery of outstanding claims.
FTI Group, a leading tourism company majority-owned by Egyptian billionaire Samih Sawiris, has filed for bankruptcy with the Munich District Court. The company cited severe financial strain exacerbated by suppliers demanding advance payments beyond its financial capacity.
Disruption to summer vacations
The Munich Regional Court filing reveals severe financial strain on FTI Group, driven by suppliers demanding advance payments beyond the company’s financial capabilities. In response, FTI has set up a hotline and website to assist customers, announcing that all trips starting June 4 will either be canceled or partially fulfilled. This disruption is expected to impact thousands of summer vacation plans.
Germany’s Foreign Ministry has assured that a travel insurance fund will manage repatriation and provide support for affected tourists. However, the Economic Affairs Ministry described the insolvency as “tragic” but confirmed it could not offer further assistance.
Government aid under review
A spokesperson from the Finance Ministry indicated that the government would review the impact of the recovery aid extended to FTI during the pandemic. The spokesperson added that minimal recovery from outstanding claims is anticipated since the government had been awaiting approval to sell receivables before the bankruptcy, which is now unfeasible.
FTI Group employs over 11,000 people worldwide and offers tours to over 40 destinations globally, partnering with 10,000 agencies in Germany. Its travel experiences span more than 120 countries and include self-drive holidays, beach holidays, individual tours, cruises, city breaks, and long-haul tours. FTI’s hotel chain, which includes brands such as Labranda Hotels & Resorts and Kairaba Hotels & Resorts, manages over 50 properties in eight countries.
Samih Sawiris’ ODH sells RAK Tourism for $40 million
Egyptian billionaire Samih Sawiris, who holds a 75.1 percent stake in FTI Group, stepped down as chairman of Orascom Development Holding (ODH) in December 2021, passing his responsibilities to his son, Naguib Samih Sawiris.
Last week, ODH sold shares in its UAE-based tourism subsidiary, RAK Tourism Investment FZC, for $40 million. The transaction includes the entire share capital of RAK, which holds leasehold rights to The Cove Rotana Hotel, a 349-room luxury resort in Ras Al Khaimah.
