Wednesday, August 12, 2009

Negotiations continue on refunding of German Container Shippers

Hapag Lloyd seek financial lifeline to weather recession
Shipping News Feature

GERMANY - Discussions were ongoing at a meeting of shareholders and interested parties when Hapag Lloyd advised on the report by their financial consultants which recommended state guarantees of circa € 1 billion to insure against the companies proposed further borrowings.

Hapag Lloyd is owned by TUI, a German tourism group and the Albert Ballin consortium, an alliance of investors including Hamburg’s state government and insurance and banking interests.

There were heated discussions back in April between members of the alliance regarding the initial terms which saw Albert Ballin gain control of the group after a battle with Singapore based freight group NOL.

The situation now is that after shareholders put up €330 million in July, they are now being asked for a further € 420 million. TUI have apparently agreed to provide credit for the group but details of where the balance of the € 1.75 billion total which the group requires is to come from and how it will relate in terms of loans and equity options are still not clear.

The consultants report at least, seems comparatively upbeat. Despite the huge sums involved it views the problems as a temporary downturn in the most difficult financial market.

The company believes itself to be in a good position to ensure future growth. In a statement regarding refinancing it said the Board were in “advanced, constructive discussions on its arrangements”