Hapag-Lloyd moves closer to US$1.76 billion in state aid

GERMAN container shipping line Hapag-Lloyd is said to be on track to gaining approval for EUR1.2 billion (US$1.76 billion) in state loan guarantees, according to the German economic ministry.

"First, the budget committee of the German lower house must meet to discuss the case," said a ministry statement.

Reuters cited unnamed sources as saying that Hapag-Lloyd would run out of money in November without state aid. It noted that the carrier is expected to post a $900 million loss this year.

For Hapag-Lloyd to qualify for the state loan guarantees, the carrier would first be required to make cuts over the next three years and Hapag-Lloyd's owners would need to contribute EUR1.9 billion, the ministry said.

Hapag-Lloyd's works council and management are reported to have already agreed to cut 120 of 1,100 jobs in Germany to reduce costs by up to EUR900 million a year.

"We rather expect 180 job cuts," one unnamed labour representative was quoted as saying in the report.

 

Source: www.schednet.com