TUI mulls Hapag-Lloyd loan
On Tuesday TUI AG confirmed it is mulling making a loan to Hapag-Lloyd after it has sold the ocean container carrier.
The German tourism company said a loan would ensure the liquidity of the world's fifth-largest liner operator after it has been purchased by the Hamburg-based Albert Ballin investment group.
The parent company stressed the potential loan was not aimed at "rescuing" the takeover following reports Ballin investors wanted to re-negotiate the sale price to reflect the slump in container shipping since the deal was agreed to in mid-October.
"We are not making a loan to the [Ballin] consortium. We are considering lending Hapag-Lloyd the money after the deal is done," said TUI spokesman Robin Zimmermann. "It has nothing to do with the purchase price."
The company has not yet decided on the size of the loan and dismissed as speculation German press reports of a financing facility worth 1 billion euros [$1.3 billion].
But TUI said it is standing by to step in should a bank involved in financing the takeover use a "change of control" clause to withdraw its support for long-term financing once the deal is closed. The loan also could be used to plug any shortfall caused by a bank quitting the syndicate that agreed to lend Hapag-Lloyd $750 million to acquire 29 container ships from TUI three days after the carrier's sale was agreed to in October.
"We are willing to lend extra money…limited to a timeline and with a return on the money," Zimmermann said.
The Royal Bank of Scotland, which had to be rescued by the British government last year and recently reported Britain's biggest corporate loss, is said to be planning to withdraw finance from Hapag-Lloyd after TUI sells the carrier.
In October TUI agreed to sell Hapag-Lloyd for 4.45 billion euros [$5.7 billion] including net debt of 1.3 billion euros [$1.7 billion] to investors including logistics billionaire Klaus Michael Kuehne and the city-state of Hamburg. Following the sale, TUI bought a 33-percent stake in the carrier for 700 million euros [$896 million].
Zimmermann said the Hapag-Lloyd sale on Friday is expected to be cleared by European Union competition regulators. The deal should close by mid-March, he added.
The German tourism company said a loan would ensure the liquidity of the world's fifth-largest liner operator after it has been purchased by the Hamburg-based Albert Ballin investment group.
The parent company stressed the potential loan was not aimed at "rescuing" the takeover following reports Ballin investors wanted to re-negotiate the sale price to reflect the slump in container shipping since the deal was agreed to in mid-October.
"We are not making a loan to the [Ballin] consortium. We are considering lending Hapag-Lloyd the money after the deal is done," said TUI spokesman Robin Zimmermann. "It has nothing to do with the purchase price."
The company has not yet decided on the size of the loan and dismissed as speculation German press reports of a financing facility worth 1 billion euros [$1.3 billion].
But TUI said it is standing by to step in should a bank involved in financing the takeover use a "change of control" clause to withdraw its support for long-term financing once the deal is closed. The loan also could be used to plug any shortfall caused by a bank quitting the syndicate that agreed to lend Hapag-Lloyd $750 million to acquire 29 container ships from TUI three days after the carrier's sale was agreed to in October.
"We are willing to lend extra money…limited to a timeline and with a return on the money," Zimmermann said.
The Royal Bank of Scotland, which had to be rescued by the British government last year and recently reported Britain's biggest corporate loss, is said to be planning to withdraw finance from Hapag-Lloyd after TUI sells the carrier.
In October TUI agreed to sell Hapag-Lloyd for 4.45 billion euros [$5.7 billion] including net debt of 1.3 billion euros [$1.7 billion] to investors including logistics billionaire Klaus Michael Kuehne and the city-state of Hamburg. Following the sale, TUI bought a 33-percent stake in the carrier for 700 million euros [$896 million].
Zimmermann said the Hapag-Lloyd sale on Friday is expected to be cleared by European Union competition regulators. The deal should close by mid-March, he added.