TUI AG said investments in its Hapag-Lloyd shipping line will be scrapped this year, a day after the company renegotiated the sale of the business to a Hamburg-based investment group.
TUI, the owner of Europe's biggest travel company, will also cut its debt by nearly three-quarters to 1.1 billion euros (S$2.16 billion) after the deal closes next month, chief financial officer Rainer Feuerhake said on Friday on a conference call.
He also said TUI will consider distributing some of the Hapag sale's proceeds to shareholders, and won't decide soon whether to raise its stake in the tourism unit, UK-traded TUI Travel plc.
TUI, which is selling control of Hapag to Albert Ballin, said on Thursday that it agreed to keep a 43 per cent stake in the company, rather than the previously agreed 33.3 per cent.
It's also extending an extra billion euros in credit to Hapag to keep the shipping line running smoothly.
Albert Ballin's shareholders include German billionaire Michael Kuehne, the city of Hamburg and a local bank.
The extra loan prompted a downgrade to 'sell' from 'buy' on Friday by DZ Bank, sending the shares down about 3 per cent. The stock soared on Thursday as the renegotiated sale reassured investors concerned the deal might collapse.
TUI said on Friday that it holds a put option to sell all of its remaining Hapag stake to Albert Ballin from 2012.
It can sell a 10 per cent stake until 2014. The company said on Thursday it will get 1.6 billion euros in cash from the sale, less than it previously expected.
TUI, the owner of Europe's biggest travel company, will also cut its debt by nearly three-quarters to 1.1 billion euros (S$2.16 billion) after the deal closes next month, chief financial officer Rainer Feuerhake said on Friday on a conference call.
He also said TUI will consider distributing some of the Hapag sale's proceeds to shareholders, and won't decide soon whether to raise its stake in the tourism unit, UK-traded TUI Travel plc.
TUI, which is selling control of Hapag to Albert Ballin, said on Thursday that it agreed to keep a 43 per cent stake in the company, rather than the previously agreed 33.3 per cent.
It's also extending an extra billion euros in credit to Hapag to keep the shipping line running smoothly.
Albert Ballin's shareholders include German billionaire Michael Kuehne, the city of Hamburg and a local bank.
The extra loan prompted a downgrade to 'sell' from 'buy' on Friday by DZ Bank, sending the shares down about 3 per cent. The stock soared on Thursday as the renegotiated sale reassured investors concerned the deal might collapse.
TUI said on Friday that it holds a put option to sell all of its remaining Hapag stake to Albert Ballin from 2012.
It can sell a 10 per cent stake until 2014. The company said on Thursday it will get 1.6 billion euros in cash from the sale, less than it previously expected.