Hapag-Lloyd's Owners Will Provide 1.86 Billion Euros in Aid

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2009

The owners of Hapag-Lloyd AG will give 1.86 billion euros ($2.7 billion) to the container-shipping company as part of a rescue package comprising cash injections, loans and credit guarantees. The financial help for Hapag comprises 923 million euros ($1.34 billion) pledged last month by the owners and additional help of about 940 million euros in hybrid loans from TUI AG and suspended interest and debt repayments to shareholder TUI, government officials said.
Hamburg-based Hapag’s owners, including the port city and tour operator TUI, had previously not said they were prepared to provide aid beyond the 923 million euros in cash injections and loans. The Berlin-based Economy Ministry indicated yesterday in an e-mailed statement that aid was in fact double the owners’ stated pledge.
Hanover-based TUI spokesman Robin Zimmermann declined to comment today. Daniel Stricker, a spokesman for the state finance ministry in Hamburg, also declined to comment, as did spokespeople for the Economy Ministry in Berlin.
The federal government represented by the Economy Ministry yesterday agreed to share with Hamburg 90 percent of guarantee costs for a 1.2 billion euro loan that Hapag needs after a drop in German exports hurt its business. Parliament’s budget committee will vote on the guarantee provision tomorrow. The rescue package comprising public guarantees and stakeholders’ aid still needs European Union approval.
Hapag, Germany’s biggest container shipper and the fifth- biggest worldwide, sought the rescue after the recession and a glut of new vessels led to a slump in freight rates. The container line expects to post a loss of about 900 million euros this year and as much as 500 million euros in 2010, Frankfurter Allgemeine Zeitung reported Sept. 16, without saying where it got the information.

Source: Bloomberg