TUI AG, together with Hapag-Lloyd's major shareholder, a Hamburg-based consortium called Albert Ballin, will provide fresh equity and 'hybrid capital' totalling €923m in order to strengthen the shipping group’s capital base.
The move follows the approval of a loan guarantee by the German government for €1.2bn of a new credit facility to stabilise Hapag Lloyd, which has been hit by the downturn in world trade.
TUI will provide around €124m to Hapag-Lloyd and convert loans already granted worth €700m into ‘hybrid capital’, or loans that will be paid late in case of bankruptcy.
TUI will be entitled to convert half of this €700m figure into shares as of 2011. TUI’s stake in Hapag-Lloyd would rise to a maximum of 49.9% in the event of an exercise of the conversion right.
The Albert Ballin consortium will acquire the revolving credit facility (RCF) totalling €200m from TUI and convert the RCF into equity for Hapag-Lloyd.
In order to avoid a dilution of its stake, TUI will also convert €153m of the loans already granted into equity proportionally to its percentage stake in Hapag-Lloyd.
Related news from e-tid.com:
TUI agrees Hapag-Lloyd funding (14/08/2009)
Hapag-Lloyd sale lifts TUI AG into profit (11/05/2009)
TUI AG finalises Hapag-Lloyd sale (27/02/2009)