TUI cancels IPO of Hapag-Lloyd

TUI cancels IPO of Hapag-Lloyd    TUI AG said today it has decided not to go ahead with the planned initial public offering of its shipping subsidiary Hapag-Lloyd AG.
   The German tourism-to-transport group, based in Hannover, said the situation in the capital markets changed during the preparations for a possible IPO of Hapag-Lloyd.
   “The market for IPOs is currently a buyer’s market in which companies can only be placed at substantial discounts,” said Michael Frenzel, chief executive officer of TUI. “Against this background we do not see a fair chance of generating the true value of Hapag-Lloyd AG by means of an IPO.”
   TUI was interested in selling part of the capital of Hapag-Lloyd via a stock market listing by the end of the year to reduce debts.
   However, the German group now says it has already reduced its net debt through divestments. “The envisaged further reduction in debt can successfully be achieved without an IPO for Hapag-Lloyd,” TUI said.
   Hapag-Lloyd, comprising Hapag-Lloyd Container Line and Hapag-Lloyd Cruises, remains a profitable activity within the group. Hapag-Lloyd raised its earnings by percent to 104 million euros ($127 million) in the first half of the year, as revenue from shipping increased 13 percent to 1.25 billion euros ($1.5 billion).
   “It is one of the most successful and best performing companies in the persistently growing market for container transport,” TUI said.
   TUI expects 2004 to be a strong business year in shipping again and anticipates ongoing growth in subsequent years.
   This is the second aborted attempt by TUI, previously known as Preussag, to complete an IPO of its shipping subsidiary. The earlier plan by TUI was to list Hapag-Lloyd on the stock market in 2001.