Bruce Barnard | Aug 25, 2010 12:40PM EDT
German ocean container carrier Hapag-Lloyd will mull plans to issue a $630 million corporate bond and extend existing credit lines at a meeting of its supervisory board on Thursday, according to Financial Times Deutschland.
The meeting also will consider whether there is still a need for a government loan guarantee of $1.5 billion granted when the carrier came close to collapse during the container shipping slump of 2009.
The $630 million bond is aimed at making Hapag-Lloyd more independent of its largest single shareholder, German tourism group TUI, Reuters said, quoting two people familiar with the issue.
TUI agreed to sell Hapag-Lloyd, the world's fifth largest carrier, for around $6 billion to the Hamburg-based Albert Ballin investor group in 2008 but was forced to retain a larger than planned 43.3 percent stake after the container shipping slump threatened to derail the deal.
Hapag-Lloyd also plans to obtain a syndicated credit line of about $630 million, Reuters reported.
It is not clear whether the supervisory board will agree on the bond, credit line and government loan guarantee tomorrow or postpone decisions until a later date.
TUI declined to comment on the report, referring to a recent statement by chief financial officer Horst Baier that the company is constantly reviewing all options to improve its financial situation.
The Albert Ballin consortium, which owns 56.7 percent of Hapag-Lloyd, also declined to comment on the reports.
But TUI's main shareholder, logistics billionaire Klaus-Michael Kuehne, has urged TUI in the past to cut its stake in Hapag-Lloyd.
Hapag-Lloyd has staged a strong financial recovery on surging traffic volume and ocean freight rates. It earned a record $294 million before interest, taxes and amortization in the second quarter compared with a $250.3 million loss in the year earlier period.
-- Contact Bruce Barnard at brucebarnard47@hotmail.com.