3Q profit may speed up Hapag sale

German container shipping company Hapag-Lloyd posted a record third-quarter operating profit that sets the scene for a possible initial public offering (IPO) next year or the disposal of the line.

Hapag-Lloyd in the three months through September posted an operating profit of US$368.8 million, compared with a year-earlier loss of $249.66 million.

Part-owner TUI AG will use the third quarter numbers to evaluate interest from investors, one source familiar with the plans said.

"With these excellent operating results, all our options for the best possible divestment have been secured," TUI chief executive Michael Frenzel said.

Sources told Reuters in September TUI was preparing to float its remaining stake in Hapag-Lloyd and might use the proceeds to buy back TUI Travel.

"This (Hapag's third quarter profit) is good news and could accelerate the disposal of Hapag-Lloyd," said one analyst who did not wish to be named as he was not permitted to speak to the press. He said an IPO was an option alongside a sale to its other current owners.

The German tourism group, which owns TUI Travel, in 2008 agreed to sell the majority of Hapag-Lloyd to the Albert Ballin consortium of investors.

But the financial crisis derailed the deal, and TUI ended up keeping a larger than planned 43 percent stake and giving Hapag-Lloyd loans of about $3.37 billion.

The container shipping company has gained more financial independence from former parent TUI by giving back $1.62 billion in state guarantees and issuing several hundred millions of debt.

By the end of the year, Hapag is planning to have paid back all its debt to TUI. Part of this is the conversion of a hybrid loan, which will increase TUI's stake in Hapag to 49.8 percent.
(Source:www.cargonewsasia.com)