Bruce Barnard | Feb 23, 2009 7:00PM EST
TUI likely will acquire a bigger stake in Hapag-Lloyd than it originally planned in order to finalize the sale of the world's fifth-largest ocean carrier.
The German tourism group bought back a 33.3 percent stake in Hapag-Lloyd after agreeing to sell the carrier to the Hamburg-based Albert Ballin investor group for 4.45 billion euros ($5.7 billion) in October.
One of the investors now wants to reduce their stake because of difficulties in arranging credit, according to an industry source.
The sudden collapse in global container traffic and freight rates since the deal was reached also has prompted Albert Ballin investors to re-examine the deal.
TUI said it would not comment on market speculation.
But the company is understood to be talking with the Albert Ballin investors about buying the unwanted stake after the deal is closed. TUI paid 700 million euros ($900 million) for its 33.3 percent stake in Hapag-Lloyd.
The Albert Ballin investors include German logistics billionaire Klaus Michael Kuehne, with a 25.1 percent stake, and the city of Hamburg with 23 percent. Other investors are MM Warburg bank, HSH Nordbank and Signal Iduna, an insurance company.
TUI shares had fallen 14 percent to a 16-year low by late Monday after the Handlesblatt newspaper reported the company might have to accept a lower price for Hapag-Lloyd because the Albert Ballin investors can't raise finance for the deal.
Robert Zimmerman, a TUI spokesman, said the price would not be renegotiated.
TUI continues to talk with the Albert Ballin consortium about the size and conditions of a loan it has offered to Hapag-Lloyd after the sale to ensure the carrier's liquidity during the downturn in the container market. After the deal closes, Hapag-Lloyd will hold loans totaling around 2 billion euros ($2.6 billion), including 1.3 billion euros transferred from TUI.
TUI is prepared to lend Hapag-Lloyd an additional 1billion euros, according to reports in Germany.
Despite the latest hitches, TUI said it is confident the deal will close before the release of its full-year earnings on March 25.
