TUI Travel‘s controlling shareholder, German-based TUI AG, has performed a u-turn by investing in container shipping line Hapag-Lloyd months after trying to exit the shipping sector and sell a majority stake in the company.
TUI will provide €215 million in short-term financing – about two-thirds of a €330 million cash injection into Hapag-Lloyd, in which TUI retains a 43% stake.
The group had previously sought to sell its share of Hapag-Lloyd and focus exclusively on tourism, with cash from the sale due to fund travel company acquisitions.
The global downturn in trade has left shipping companies in trouble and TUI was unable to find a buyer.
The TUI AG supervisory board approved the funding as “a first package of measures” to support Hapag-Lloyd, suggesting there will be more to come.
The deal involves TUI taking a stake in a Hamburg container terminal that it hopes Hapag-Lloyd will subsequently be in a position to take over. The group’s board repeated its intention to exit shipping “in the medium term”.
However, Nomura International transport analyst Mark McVicar told the Financial Times: “TUI is becoming more involved in the container business, not less.”
Hapag-Lloyd has said it requires €1.75 billion to secure its future. The shipping line is all that remains of the German heavy industry and shipping conglomorate from which TUI emerged.
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