UPDATE 1-Brazil tourism operator CVC's board approves capital raise

(Adds details from filing, recasts headline)

SAO PAULO, July 10 (Reuters) – The board of Brazilian tourism operator CVC has approved a capital increase of up to 301.7 million reais ($56.5 million) as the company grapples with travel restrictions related to the COVID-19 pandemic, a securities filing showed on Friday.

The company said up to 23.5 million shares would be issued at 12.84 reais each.

The company also said it will give shareholders participating in the capital raise subscription rights that may increase the total proceeds from the deal by up to 401 million reais, provided certain conditions are met.

“There is still a scenario of great volatility and uncertainty around the impacts of the COVID-19 pandemic,” CVC said, adding it cannot yet predict the timing for a recovery of both the world economy and the sectors in which it operates.

CVC said the transaction may boost its liquidity position, allowing it to resume the sale of travel packages on credit and installments, which make up about 85% of its total sales, the filing said.

The company also reiterated it is continuing to revise financial statements relative to 2019, and prior periods, as it tries to gauge the impact of potential accounting errors.

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