They need to be saving every penny they can scrape together to survive this long downturn in international container shipping.
I don't subscribe to Lloyd's List, but this is the beginning of their article (the free part)
CMA CGM is seeking the cancellation of 15 small containerships as part of a much wider restructuring of its huge orderbook.
South Korean shipbuilders are now considering a series of proposals from the French line that is stepping up the pressure on yards to delay deliveries of the much bigger ships it has on order.
I'm not sure what they mean by "small containerships". The last vessel CMA CGM took delivery of was 13,300 TEUS. That is huge. I guess "small" is around 6000-8000 TEUS.
From The Journal of Commerce, Nov. 10, 2009
CMA CGM, facing economic troubles that threaten the carrier's financial stability, took delivery Tuesday of one of the world's largest container ships, a 13,300-TEU behemoth that will become the company's flagship.
The CMA CGM Christophe Colomb is an energy-efficient vessel coming in at 1,198 feet long, 168 feet wide, and with a draft of 51 feet, among the largest of a new generation of ships that were ordered in boom times and now are arriving amid steep decline in shipping demand.
I haven't seen any mention recently as to the demand by creditors that the Chairman resign.
Perhaps he got the message.
2 comments:
Lynda - Enjoy your quick-read shipping note each day.
Question-What was going on with the Baltic Dry Index this summer? It kept rising monthly all the way through to Nov. and is now falling like a rock?
http://www.bloomberg.com/apps/quote?ticker=BDIY%3AIND
Thanks for the update on CMA CGM. It will be interesting to see how the shipyards react. It appears the fix is well in at this point.
My reading suggests that the reason CMA CGM has cancelled the sub 6000 TEU ships on order is that those can be chartered in or let go as necessary on an intelligent future mix of (a few dozen) long term charters and (hundreds of) short term charters, rather than purchased, whereas the huge 13,000 TEU ships are in a class by themselves with some advantages of scale - and of course, prestige - and will be owned directly by CMA CGM as the backbone of its fleet.
It is also possible that CMA CGM will invite its recent spinoff company - Global Ship Lease - to pick up a portion of the "cancelled" CMA CGM orders, perhaps at renegotiated prices. Doing so will require the participating banks, most of which are common to both CMA CGM and GSL, to follow up the CMA CGM debt restructuring with a corresponding plan for extending the necessary additional borrowing base to GSL. One method for achieving this result would be for banks to apply the proposed Hamburg LTAV calculation to GSL ships under long term charter to CMA CGM. Surely there is no better case for the Hamburg valuation model, given GSL would be sporting brand new 10+ year charters on the covered ships, even if one objects to utilizing the Hamburg model more broadly to value unchartered ships or those coming off charter in the midst of today's depressed container market.
As for Jacque Saade's future, his family owns CMA CGM and he will maintain substantial control of the company, even if, as seems likely, Denis Ranque is installed by the banks as an interim CEO or co-CEO with Saade as non-executive Chairman or co-CEO & Chairman. It is a pound of flesh for the banks, to be discarded in 18-24 months as CMA CGM resumes compliance with its debt package.
JMHO based on reading the news.
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