Tuesday, December 15, 2009

CMA CGM still in talks on debt

CMA CGM has missed, for the second time, their targeted date for refinancing debt.

From Lloyd's List

No debt deal for CMA CGM yet

Andrew Spurrier and Janet Porter - Tuesday 15 December 2009

FRENCH container shipping group CMA CGM has again overshot its target date for completing talks with its banks on a restructuring of its $5.6bn debt.
The group, which had originally signalled a mid-November date, told its employees last month that it needed to get agreement on certain key measures by December 15.
Today, however, the group admitted ...

The rest of the article is available only to subscribers.

Back on Dec. 2nd I said I didn't expect them to meet the deadline (I had calculated mid-Dec to be latest Dec.18)

Now that we are into the Holiday season, it will be more difficult for them to achieve the restructuring. I guess it will have to wait until after Jan 1. I hope they have enough cash to get them through until then.


Anonymous said...

With CMA CGM returning to breakeven on a monthly operating basis in December, there are two most likely reasons the bank negotiation is dragging on longer than previously announced:

1) Details for working out newbuild deferrals and cancellations with the Korean yards have been made more difficult by the prospect CMA CGM is not going broke, and/or that the French government will keep them afloat, and

2) Having a stronger hand in view of improved financial results going forward, Mr. Saade has refused to accept certain bank demands...such as his being replaced by Denis Ranque.

All the above is confirmed by Saade's being designated an Officer in the French Legion of Honour last week. His fortunes seem to be rising, and that is most likely the reason for delay. The longer he waits, the stronger his position appears to become.

Anonymous said...

Well, I was half right...

CMA CGM today reached agreement with its creditors on a debt restructuring and additional $500 million borrowing authority.

This paves the way for an additional $400-$600 million private equity and/or French sovreign wealth fund equity investment.

It turns out that Jacques Saade has agreed to step down into the title of President and allow the installment of Philippe Soulie as CEO. It appears Mr. Saade's Legion of Honour ceremony was both an honor and a way of softening the blow a bit.

In any case, CMA CGM is breaking even on an operating basis, has a new lending regime, has apparently satisfied its banks concerning the order book, and a new CEO likely to do some further cost cutting and to divest assets as needed to reduce the overall debt load.

Not quite the calamity some had feared.


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