TUI AG (TUI1.XE), a holding company with assets in tourism and shipping, said Wednesday the supervisory board of its container shipping unit Hapag-Lloyd approved a refinancing plan, whereby Hapag-Lloyd will give back its costly state loan guarantee, place a corporate bond, and set up a new syndicated credit line.

TUI owns around 43% in Hapag-Lloyd, a consortium Albert Ballin GmbH & Co. KG owns the remaining 57%.

TUI said in a statement it remains "committed to maximizing the value of its Hapag-Lloyd investment and to closely monitoring all options to exit the business."

With Hapag-Lloyd's repayment of the state loan guarantee, which it doesn't need anymore because business has picked up well, any payment and financing restrictions set by such a guarantee become obsolete. This means Hapag-Lloyd can now make payments to other debtholders and TUI expects a EUR65 million payment from deferred interest on loans to Hapag, in October.

TUI's stake in Hapag will rise to 49.8% at the end of the year at the latest, because EUR350 million from a hybrid loan will be converted into Hapag-Lloyd equity. TUI expects a EUR227 million bridge loan that TUI granted Hapag-Lloyd, to be paid back in the near future.

Hapag-Lloyd is planning to issue euro and dollar-denominated bonds valued at $500 million, one of the banks hired to manage the deal said earlier Wednesday. The deal will be split into two parts--a five-year bond, non-callable for three years, and a seven-year bond, non-callable for four years.

TUI also owns 52% of U.K-.listed TUI Travel PLC (TT.LN).

    -By Olaf Ridder and Hilde Messer, Dow Jones Newswires; +49 69 29725 506; hilde.messer@dowjones.com

(Mark Brown in London contributed to this article.)
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