Hapag-Lloyd shareholders okay bail out if government offers guarantees

Time:2009-08-19 Browse:23 Author:RISINGSUN

SHAREHOLDERS of troubled Hanover container line Hapag-Lloyd have agreed to more rescue funding if the state government advances loan guarantees, reports Bloomberg.
The agreement means shareholders have committed to provide US$600 million more to Hapag-Lloyd, after spending $470 million to buy a Hamburg container terminal from the carrier, reported American Shipper. The $470 million is expected to last through October, with the other shareholder money and state aid expected.
Former Hapag owner TUI, the German travel giant, which still holds 43 per cent, said HSH Nordbank, representing Hapag lenders, would likely put in for government loan guarantees worth $1.71 billion.
TUI also said that the container line needs financing of $2.78 billion, $286 million more than previously anticipated. In addition to state guaranteed bank loans, shareholders would contribute $1.07 billion.
TUI reported its second-quarter loss widened to $767 million from $81 million a year earlier, hurt by loans to Hapag. A risk evaluation of the loans led to $530 million in interest charges.
TUI has played "bank" for Hapag, its chief financial officer Rainer Feuerhake said on a conference call. TUI expects a positive impact from the evaluation as soon as the global container business recovers, he said.