Hapag-Lloyd AG, Germany’s largest container-shipping line, will get an emergency credit of 300 million euros ($429 million) if all its shareholders agree, a lawmaker said.
The cash injection will be part of a 1.75 billion-euro rescue package by lenders and shareholders including TUI AG to secure Hapag-Lloyd’s long-term viability, Barbara Ahrons, a Christian Democratic Union member of Hamburg’s parliament, said in a telephone interview today. The port city of Hamburg is the company’s second-biggest shareholder after TUI.
Hapag-Lloyd has announced shorter working hours to counter a slump in container shipping and freight rates, a result of an increase in the supply of new vessels and slowing world trade. A.P. Moeller-Maersk A/S, owner of the world’s largest container shipper, said last month that cargo volumes may drop more than 10 percent this year and show no growth in 2010 as the industry suffers a “completely unprecedented” decline.
Daniel Stricker, a spokesman for Hamburg Finance Senator Michael Freytag, said today that talks between shareholders “are still under way.” The city’s all-party budget committee will meet at 5 p.m. to vote on a first batch of aid, according to Ahrons.
Travel company TUI owns 43.3 percent of Hamburg-based Hapag-Lloyd, according to the shipping line’s Web site. The Albert Ballin investor group, which includes the Hamburg city government, German billionaire Klaus Michael Kuehne and M.M. Warburg & Co., has a 56.7 percent stake. Hamburg alone has a holding of about 23 percent.
German banks will be asked to provide a 1 billion-euro loan backed by the federal government, a person familiar with the talks said July 9, declining to be identified because the information isn’t public. TUI would shoulder 325 million euros and Albert Ballin 425 million euros, the person said. The Hamburg city, part of Albert Ballin, would pay 170 million euros.
The cash injection will be part of a 1.75 billion-euro rescue package by lenders and shareholders including TUI AG to secure Hapag-Lloyd’s long-term viability, Barbara Ahrons, a Christian Democratic Union member of Hamburg’s parliament, said in a telephone interview today. The port city of Hamburg is the company’s second-biggest shareholder after TUI.
Hapag-Lloyd has announced shorter working hours to counter a slump in container shipping and freight rates, a result of an increase in the supply of new vessels and slowing world trade. A.P. Moeller-Maersk A/S, owner of the world’s largest container shipper, said last month that cargo volumes may drop more than 10 percent this year and show no growth in 2010 as the industry suffers a “completely unprecedented” decline.
Daniel Stricker, a spokesman for Hamburg Finance Senator Michael Freytag, said today that talks between shareholders “are still under way.” The city’s all-party budget committee will meet at 5 p.m. to vote on a first batch of aid, according to Ahrons.
Travel company TUI owns 43.3 percent of Hamburg-based Hapag-Lloyd, according to the shipping line’s Web site. The Albert Ballin investor group, which includes the Hamburg city government, German billionaire Klaus Michael Kuehne and M.M. Warburg & Co., has a 56.7 percent stake. Hamburg alone has a holding of about 23 percent.
German banks will be asked to provide a 1 billion-euro loan backed by the federal government, a person familiar with the talks said July 9, declining to be identified because the information isn’t public. TUI would shoulder 325 million euros and Albert Ballin 425 million euros, the person said. The Hamburg city, part of Albert Ballin, would pay 170 million euros.