TUI provides update on Hapag-Lloyd financing

TUI provides update on Hapag-Lloyd financing    Hapag-Lloyd will receive 923 million euros ($1.36 billion) in support from its corporate owners, following the German government's approval last week for a 1.2 billion euros ($1.77 billion) loan guarantee of a new credit facility.
   TUI, the tourism company that spun off the container shipping line earlier this year, said Thursday the additional funds would strengthen the group's capital base.
   TUI retains a 43.33 percent equity stake in the company. The rest of the company is owned by the “Albert Ballin” consortium, comprising the City of Hamburg, K'hne Holding AG, HSH Nordbank, M.M.Warburg Bank and the insurers Signal Iduna and HanseMerkur.
   The latest moves follow the announcement in July that Hapag-Lloyd would also sell its 25.1 percent stake in Container Terminal Altenwerder (CTA) in Hamburg to raise another 315 million euro ($448 million) to TUI and Albert Ballin with the proviso that it would buy it back when the shipping market improves. But TUI said in order to fulfill conditions by the federal government and the banking consortium, the 25.1 percent stake in CTA will be returned to Hapag-Lloyd AG. TUI said it will therefore convert its portion of the purchase price already paid for CTA of 215 million euros into hybrid capital and that the Hamburg-based consortium will repay 25 million euros to TUI in 2011.
   Additional information about the restructuring of the Hapag-Lloyd financing is available here.