July 28 (Bloomberg) -- Hapag-Lloyd AG, Germany’s largest container-shipping line, will get an emergency credit of 300 million euros ($429 million) provided all its shareholders agree, a lawmaker said.

The cash injection will be part of a 1.75 billion-euro rescue package by lenders and shareholders including TUI AG to secure Hapag-Lloyd’s long-term viability, Barbara Ahrons, a Christian Democratic Union member of Hamburg’s parliament, said in a telephone interview today. The port city of Hamburg is the company’s second-biggest shareholder after travel company TUI.

“We have a solution for Hapag,” Hamburg Finance Senator Michael Freytag told reporters before a meeting of the city’s all-party budget committee which is scheduled to vote on a first batch of aid. “I believe Hapag can breathe freely.”

Hapag-Lloyd has announced shorter working hours to counter a slump in container shipping and freight rates, a result of an increase in the supply of new vessels and slowing world trade. A.P. Moeller-Maersk A/S, owner of the world’s biggest container shipper, said last month that cargo volumes may drop more than 10 percent this year and show no growth in 2010 as the industry suffers a “completely unprecedented” decline.

TUI owns 43.3 percent of Hapag-Lloyd, according to the shipping line’s Web site. The Albert Ballin investor group, which includes the Hamburg city government, German billionaire Klaus Michael Kuehne and M.M. Warburg & Co., has a 56.7 percent stake. Hamburg alone has a holding of about 23 percent.

Stake Sale?

Hapag may gain the cash injection by selling its 25.1 percent stake in Hamburger Hafen und Logistik AG’s Altenwerder Container Terminal to an existing shareholder, Ahrons said, without elaborating. Altenwerder is Europe’s most modern container terminal.

Hapag shareholders are seeking as much as 750 million euros in fresh capital for the company, of which TUI may shoulder 325 million euros and Albert Ballin 425 million euros. Hamburg would pay 170 million euros, according to a statement by Ahrons on July 24.

German banks will be asked to provide an additional 1 billion-euro loan backed by the federal government, Ahrons said, confirming newspaper reports. Lawmakers in Hamburg, one of 16 German states, will decide today on the scope of initial financial help for Hapag.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: July 28, 2009 11:23 EDT