U-Turn on Previous Strategy

Following TUI management’s decision to separate the container shipping business in a U-turn on its previous strategy, the sale of Hapag-Lloyd seems to be the most likely option at the moment, Lloyd’s List reports.

According to chief executive Michael Frenzel, three possible options will be examined – spin-off, merger with another shipping company or sale –  the latter is probably the most speedy solution.

A spin-off would be the most lengthy and complicated solution, while a merger could only be an interim solution, as TUI would then be shareholder in a bigger shipping company. There are pros and cons for each alternative, – he added. 

Mr Frenzel would not admit that the group had given in to pressure from leading shareholders, John Fredriksen in particular.

The first step in the separation business will be the relocation of necessary assets to Hapag-Lloyd in order to allow it to become an independent company. We will have to get the ships to Hapag-Lloyd, Mr Frenzel explained.

The planned split does not include the Hapag-Lloyd cruise business, which will come under the TUI umbrella.

It was pointed out that with regard to the rumours on NOL being interested in buying the Hamburg company, M. Frenzel said that talks and considerations, but no negotiations were taking place at the moment.

In 2007 TUI’s profits grew by 47% and amounted to 616 mn euros. Operating earnings from container shipping more than doubled and totaled 185.5 mn euros. Shipping volumes rose by 9% - up to 5.45 mn TEU. 

Source: Seanews