TUI AG confirms Europa 2 purchase for €278 million

[HostDave]

The TUI Group purchases the cruise ship Europa 2, taking a strategically and commercially important investment decision for the Group and its Hamburg-based subsidiary Hapag-Lloyd Kreuzfahrten. Europa 2, TUI AG said in a statement.

"The transaction will replace the previous charter agreement of the ship which was newly commissioned in 2013. The profitability of the Group’s Division Hapag-Lloyd Kreuzfahrten will already be significantly increased in the current financial year 2014/15. The purchase price for the ship totals 278 million euros. It consists of a cash component of around 67 million euros payable to the previous owner and the assumption of 211 million euros of debt.

Fritz Joussen, CEO of the TUI Group: “The acquisition of the Europa 2 enables us to achieve further improvements in the results of Hapag-Lloyd Kreuzfahrten. We expect the transaction to already create positive earnings effects in the current financial year and improve EBITA at Hapag-Lloyd Kreuzfahrten from financial year 2015/16 by around 20 million euros per annum versus the charter arrangement.“

At its annual press conference held in December 2014, TUI had already announced that Hapag-Lloyd Kreuzfahrten was expected to achieve a turnaround in the current financial year – under the terms and conditions of the existing charter agreement for the cruise ship. Following the merger between TUI AG and TUI Travel in December 2014, the long-term growth of the new TUI Group is additionally to be supported by a flexible asset-right business model.

The ownership structure of the existing and new hotels and cruise ships will be optimised in order to enhance the efficiency of operations and increase the value of the assets. The purchase of EUROPA 2 constitutes a key milestone in this context and increases efficiency.

The Hapag-Lloyd Kreuzfahrten Division has achieved an excellent operating performance in the past 18 months. When the initial start-up difficulties following the commissioning of the new ship had been overcome, EUROPA 2 developed and convinced its own clientele in the luxury segment. Occupancy and rates have been