CMA CGM customers told of restructuring

Source:Lloydlist

THE world's third-largest container line, CMA CGM, has written to its customers advising that it has created a committee of its main lending banks to "consolidate the group's financial position and ensure the financing for its growth strategy", writes Michelle Wiese Bockmann .

Restructuring talks would be completed by November, the letter indicated, which was dated October 2 and signed by the group chief executive Farid Salem, and chief executives Rodolphe Saadé and Jean-Mark Lacave.

A severe contraction of world trade had led to unprecedented declines in cargo volumes and rates, and "numerous shipping companies" had sought support from shareholders and financial partners and to delay or cancel new ships on order, the letter explained.

Crucially, it revealed that the French government supported the committee and would be "kept regularly informed of its progress".

The letter added: "These talks, which are scheduled to be completed by November, will have no impact on the nature and frequency of services provided by CMA CGM neither in the short nor the medium term."

The letter followed swirling rumours of financial troubles in the press in late September, amid reports that the line had sought a one-year debt moratorium. The family-owned group, led by Jacques Saadé, might have to sell a stake in exchange for any government bailout.

The troubled French container line is struggling to manage its aggressive 10-fold expansion of its slot capacity over the last 10 years, according to analysis from Alphaliner, an industry weekly newsletter.

CMA CGM has also ordered 40 boxships with 369,500 teu capacity worth $5.1bn at Asian shipyards, and amassed an estimated $5.6bn debt, Alphaliner reported.

Late last month, the liner disclosed that it was in talks to remove some newbuildings from its orderbook in South Korea and delay the delivery of others.