TUI said that as part of a deal with the Albert Ballin consortium, Hapag's majority shareholder, it would cut its stake in the container shipper to about 22 percent from 38.4 percent and that it stands to receive 700 million euros in cash from the consortium and from Hapag.
Eying a complete exit from container shipping to focus on its tourism operations, TUI said it retains the right to call for an IPO of Hapag with priority placement of the shares held by TUI any time from June.
TUI also remains entitled to sell the remaining Hapag shares to investors outside the Ballin consortium, it added.
"The cash inflow is to be used to further reduce debt and hence enhances the scope in core business Tourism," TUI said.
The Ballin consortium, named for the former Hapag boss credited with inventing the cruise, is a group of investors led by the German city state of Hamburg and Klaus-Michael Kuehne, majority owner of Swiss logistics group Kuehne & Nagel .
The group owns almost 62 percent of Hapag-Lloyd.
Klaus-Michael Kuehne said in a separate statement his indirect stake in Hapag through the consortium would rise to 28.2 percent from 24.6 percent
"With this renewed commitment for Hapag-Lloyd my aim remains to secure the independence of Germany's largest container shipping company with Hamburg headquarters in the long term," Kuehne said.
TUI originally tried to sell a majority stake in Hapag-Lloyd in 2008. That attempt was derailed by the global financial crisis, meaning TUI kept a larger stake than it originally intended.
Last year, plans for a flotation of the stake were scuppered by financial market turbulence and discussions with other investors from China and Oman failed to result in a deal.
Reuters reported earlier this month that TUI would only sell part of its stake as a compromise to keep Hapag-Lloyd in German hands, while making the deal affordable for the city of Hamburg and other consortium members.
As part of the agreement and with the help of Albert Ballin, Hapag will in several steps pay back the hybrid capital -- a form of long-term credit with equity characteristics -- that it received from TUI in 2009, TUI said.
TUI, which controls London-listed TUI Travel, is due to report first-quarter results on Wednesday, when it also holds its annual shareholder meeting. (Reuters)
