Monday, July 20, 2009

Hapag-Lloyd could be a money pit

When I read the headline that a major shareholder of Hapag-Lloyd was balking at putting in more cash, my first thought was, Mr. Kuehne.

Turns out, it is TUI who is having second thoughts about pouring more cash into Hapag-Lloyd.

From The Journal of Commerce (click here for link)

....But tourism giant TUI, Hapag-Lloyd’s former parent and still one of its biggest shareholders with a 43 percent stake, is reluctant to provide its $450 million contribution in cash. Instead, it wants to convert some of its $1.4 billion of loans to Hapag-Lloyd into an increased equity stake, according to a source close to the negotiations.
TUI, like most shareholders, is reluctant to put money into companies while “cash is king” in current market conditions, a source close to the Hanover-based company said.

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