TUI shareholders approve third financing package terms

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Written by Kari Reinikainen Kari Reinikainen

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Published: 07 January 2021 07 January 2021

 

 

An extraordinary shareholders meeting of TUI AG, which was held virtually, the presence, including votes cast, corresponded to 44.58 percent of the share capital. Shareholders approved the three agenda items with a large majority, the company said in a statement.

The reduction of share capital from €2.56 per share to €1.00 per share was approved by 99.59 percent of the shareholders, and the subsequent capital increase of approximately €509 million was approved by 97.95 percent. The conversion right of the WSF into shares of TUI AG in accordance with Silent Participation I was approved by 98.04 percent of shareholders.

Prior to this, the other components of the third financing package, which was announced on December 2, 2020, had already been fulfilled. The Economic Stabilization Fund (WSF) and TUI AG signed the agreement for two silent participations totaling 1.091 billion euros.

The WSF measures comprise a silent participation convertible into shares in TUI of €420 million. The second silent participation amounts to €671 million. “The second silent participation has been extended by the amount of the outstanding government guarantees as announced in the ad-hoc announcement of December 2, 2020. As soon as the guarantees are received, the second silent participation will be reduced accordingly. The EU Commission has already approved the contract,” TUI AG said.

The implementation of the components of the third financing package will also grant an prolongation of a portion of the existing KfW credit line in the amount of €500 million. This would otherwise have ceased to be available on April 1, 2021. The partial amount now also has a maturity like the rest of the existing KfW credit line (July 2022), once the outstanding senior bond is redeemed with the funds from the capital increase.

Under the third financing package, KfW is also participating in an additional loan facility together with private banks in the amount of €200 million.

Carnival group and lenders agree covenant changes

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Written by Kari Reinikainen Kari Reinikainen

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Published: 07 January 2021 07 January 2021

 

Carnival Corporation & plc, the world’s largest cruise shipping group, said and certain of their subsidiaries entered into an amendment agreement to the multicurrency revolving credit agreement originally dated May 18, 2011.

This was amended and restated most recently on August 6, 2019, among Carnival Corporation, Carnival plc, certain of their subsidiaries, the lenders party thereto and Bank of America Europe Designated Activity Company as facilities agent.

The amendment

increases the ratio of debt to capitalization from the testing date on November 30, 2021 to February 28, 2024 (Clause 26.3 of the Facility Agreement as amended by the Amendment Agreement (the “Amended Facility Agreement”)), expanding the limit of the debt to capitalization ratio;

introduces new financial covenants:  a minimum liquidity covenant from the testing date on February 28, 2021 to November 30, 2022 (Clause 26.5 of the Amended Facility Agreement), and a minimum interest coverage covenant from the testing date on February 28, 2023, for the remainder of the term of the Facility Agreement (Clause 26.4 of the Amended Facility Agreement);

restricts the grant of guarantees in respect to certain outstanding debt until November 30, 2024 unless the entity granting the guarantee was already an obligor or guarantor of such debt (Clause 27.8 of the Amended Facility Agreement), and the incurrence of security interests on certain vessels to secure certain outstanding debt until November 30, 2024 (Clause 27.9 of the Amended Facility Agreement); and

requires Carnival Corporation, Carnival plc and their restricted subsidiaries to adhere to certain negative covenants and restrictions until November 30, 2024, including, but not limited to, limitations on indebtedness, liens, investments and restricted payments (subject to certain permitted exceptions), which are substantially consistent with those contained in the indenture governing the Carnival Corporation 5.625% Senior Unsecured Notes due 2026 (Clause 27.11 of the Amended Facility Agreement).

The Amendment Agreement also provides that during the remainder of the term of the Facility Agreement EURIBOR and LIBOR shall be deemed to have a 0% floor.

Some of the lenders under the Facility Agreement and their affiliates have various relationships with Carnival Corporation, Carnival plc and certain of their subsidiaries involving the provision of financial services, including cash management and investment banking services. In addition, Carnival Corporation and Carnival plc have entered into other loan arrangements as well as certain derivative arrangements with certain of the lenders and their affiliates, the company said.

UK cruise restart to take up to three months – reports

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Written by Kari Reinikainen Kari Reinikainen

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Published: 04 January 2021 04 January 2021

It would take up to three months to restart cruise operations in the UK and the industry would need a signal this month to res7ume operations by Easter, media reports said.

“The UK Chamber of Shipping and CLIA said the restart of cruises would take up to three months, meaning that a signal was needed in January to allow the industry to get ready,” Travel Weekly said in a report.

Ministers were told that 35% of advance bookings were usually made during December and January, underlining the need for a clear statement in favour of reopening the industry, The Times reported.

Government and industry officials are due to meet in the coming weeks to discuss a possible reopening.

In the autumn, Frank del Rio, President and CEO of Norwegian Cruise Line Holdings said it would take about 60 days to bring a ship back into service from cold lay up.

Photo: P&O Cruises took delivery of Iona in the autumn, but the ship has not been able to enter service yet

Hyundai Mipo shipyard chosen to build new Interislander ferries

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Written by Teijo Niemelä Teijo Niemelä

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Published: 02 January 2021 02 January 2021

KiwiRail in New Zealand has named Hyundai Mipo Dockyard (HMD) based in Ulsan, South Korea as its preferred shipyard to build the two new Interislander ferries.

KiwiRail Chief Executive Greg Miller said the decision to work with HMD was a significant step forward for the new Interislander project and the culmination of a robust, competitive, year-long selection process.

“Our ship procurement team and the evaluation panel, including naval architects, ship brokers and maritime lawyers, have undertaken a rigorous process to select the right shipyard and this announcement, on schedule, is a great end to the year for our team,” Miller said a statement released just before the Christmas.

“KiwiRail has been working hard at this since first seeking Expressions of Interest in August last year. Based on responses to that process, we undertook a Request for Information in October 2019, followed by Requests for Proposals.

“At all stages we were impressed by the quality of applicants and today’s announcement is the culmination of the selection phase of this important procurement.

“KiwiRail has specified a Makers’ List of components – predominantly American and European, including the engines, propulsion system and navigation system - to ensure the new ships will serve New Zealand well for the next 30 years.

“The two new ferries and the upgraded terminals in Waitohi Picton and Wellington are a major investment in the future of the Cook Strait freight and passenger services, with a significant taxpayer contribution. It’s crucial that we deliver the best outcome for New Zealand and for our passengers and customers and with the selection of HMD shipyard, I am confident we have achieved that.”

Miller said after the technical and commercial negotiations phase, the aim is to have the final shipbuilding contract signed by mid-2021 and construction of the ferries underway by late 2022.

Once commissioned and built, the two new ferries will replace KiwiRail’s three ageing Interislander ferries,which are nearing the end of their working lives. KiwiRail operates around 3800 services a year, transporting about 850,000 passengers, 250,000 cars and up to $14 billion worth of freight, but with significant growth predicted.

New terminals and berths in Waitohi Picton and Wellington are planned to accommodate the new ferries and improve the Interislander service for customers and staff.

HMD is the world’s sixth-largest shipbuilder globally with decades of experience building complex ships, including HMNZS Aotearoa for NZDF.

It is over 20 years since New Zealand introduced a brand-new purpose-built ferry to its fleet. Once built, the two new ferries will be more efficient and support KiwiRail’s goal to reduce carbon emissions by 30 per cent by 2030 and be carbon neutral by 2050. The new ferries will be designed to use different energy sources through their life if these are available in New Zealand, and at day one will provide for battery operations when docking and plug into local power supply at each port.

The Government committed $400 million in Budget 2020 to the New Interislander project, building on a $35 million-dollar investment in Budget 2019.

Massimo Soprano, Ships Programme Manager at KiwiRail, said the selection process had been highly competitive with some of the best shipyards in the world putting in tenders for the contract.

“We have been fortunate to have such high-quality shipyards to choose from. In taking HMD forward into detailed negotiations we know we have a shipyard that can deliver on every front: design, production, quality, and they have a great track record on delivery,” he said.

“For KiwiRail, the quality of build is vital as the Cook Strait route works our ferries hard, and reliable performance across their anticipated 30-year life span is crucial. HMD has recently done work for the New Zealand Defence Force, so we are aware of the high-quality nature of its work.”

Miller said that despite the complexity and number of parties involved in the purchase of the two new ferries and the terminal upgrades in both Waitohi Picton and Wellington, things were progressing well with the new Interislander project.

“We have made good progress with design of the Waitohi Picton terminal redevelopment, we have now settled on our preferred shipyard to enter final negotiations and we are focusing our efforts on the redevelopment at the Kaiwharawhara terminal site in Wellington,” Mr Miller said.

A Letter of Intent (LOI) has now been signed with HMD. A LOI is a non-binding agreement that allows KiwiRail and HMD to progress to more detailed contract negotiations and is a normal step in the procurement process for large-scale ship building.