Moody's may drop TUI

Moody's Investors Service said it has placed the B1 corporate family rating and the B3 senior unsecured and subordinated ratings of TUI AG on review for possible downgrade.

The action follows the company's announcement that it intends to divest its Hapag-Lloyd shipping division to a consortium of German investors for a net consideration of about €3.3 billion, including the deconsolidation of about €1.3 billion in net debt, the agency said.

The transaction is expected to close in the first quarter of 2009, Moody's noted, adding that the rating action reflects the company's reduced business diversification following the planned sale of its shipping division, the uncertainties related to the use of proceeds, as well as the company's stated intention to pay a special dividend in 2009, which Moody's views as indicative of a shareholder-oriented policy when the company's metrics were already deemed weak for the current rating category.

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