Major Hapag investors ready to provide collateral for loan guarantee

TWO big Hapag Lloyd investors, German travel giant TUI and the City of Hamburg, now appear to be willing to sell back the 25.1 per cent stake in the Altenwerder container terminal (CTA) Hapag to provide the German government the collateral it demands before providing a vital US$1.7 billion loan guarantee.

Unless help comes, Hapag-Lloyd is expected to face a financial crisis this month and the carrier will need nearly $2.5 billion to tide it over the downturn, said an unnamed TUI official in a Journal of Commerce report.

The carrier suffered a $275 million year-on-year second quarter loss. First half losses came to $622 million against the $190 million in last year's first half, prompting shareholders to agree to a $1.3 billion worth "cash injection" plan involving the sale of the container terminal.

Former owner, Hanover based TUI, still holds 43.3 per cent of Hapag Lloyd while the City of Hamburg is a major part of the Albert Consortium that has 56.7 per cent of the world's sixth largest container carrier. These two investors appear ready to provide the $447 million needed to satisfy Berlin demands for collateral.

TUI and City of Hamburg's decision to sell back their shares will help re-activate the loan scheme that appeared to end in stalemate when Klaus-Michael Kuehne, the second biggest Ballin shareholder, refused to back the deal.

A TUI spokesman pointed out that it was not certain if the government would decide before or after Germany's September 28 general election.

(Source: www.schednet.com)