Hapag Lloyd plans IPO, sells logistics

Hapag Lloyd plans IPO, sells logistics

The parent of Hapag-Lloyd plans to offer shares of Germany's largest shipowner as it moves to take advantage of the unprecedented boom in container shipping.

TUI, a tourism, transport and logistics group, said today it intends to place around a third of Hapag Lloyd on the Frankfurt stock market through an initial public offering in the second half of 2004.

"Shipping will continue to be a part of the TUI Group," said Michael Frenzel, chairman of the executive board. "With the flotation we are taking the view that shipping will continue to grow, and we will give Hapag-Lloyd access to additional sources of financing for this purpose".

"The stock exchange listing will open up new opportunities for Hapag-Lloyd and I am convinced that investors will find our share attractive," said Michael Behrendt, chairman of the board of Hapag-Lloyd AG.

Hapag-Lloyd Container Line is TUI's best-performing unit, almost trebling operating profit in the third quarter of 2003 to 81 million euros ($102 million) from $36.5 million a year earlier on revenues up $94.5 million to $816 million. This took nine-month operating profit to $185 million from $51.7 million in the 2002 period.

German analysts value Hapag-Lloyd at between $3.53-3.65 billion.

The carrier is being offered as a pure shipping stock, made up of Hapag-Lloyd Container Line and Hapag-Lloyd Cruises. Also being sold are Hapag's non-shipping units, including VTG-Lehnkering, which is active in bulk, rail and tank container logistics, and a 67-percent stake in Algeco, a French company that supplies container modules for temporary housing.

In 2003 the carrier's fleet of 40 containerships carried over 2 million TEUs for the first time. It is taking delivery of two more ships this year and recently ordered five more vessels, each with a capacity of over 8,000 TEUs, for delivery in 2005 and 2006.