DEBT-RIDDEN container shipping giant CMA CGM is hopeful of a deal with creditors on restructuring a $400 million loan due in February as the next step to repaying the US$5.7 billion it owes to bond holders and bankers.
DEBT-RIDDEN container shipping giant CMA CGM is hopeful of a deal with creditors on restructuring a $400 million loan due in February as the next step to repaying the US$5.7 billion it owes to bond holders and bankers.
The Marseille company, the world's third largest container shipping line and now the owner of the world's biggest containership, posted $371 million third quarter profit, which boosted its creditworthiness in current talks with lenders.
Company revenue was also up nine per cent year on year to $4.2 billion, based on a 2.7 million TEU throughput, noted London's Containerisation International.
But chief financial officer Michel Sirat doubted the fourth quarter would be as good as the last, while still expecting full-year profit to surpass $400 million, the amount due in February.
On this basis he expected an agreement would be signed with the bank steering committee by the end of January, with CMA CGM being granted "extended loan maturities that fit better with revenue flow".
In a recent visit to Hong Kong to celebrate the arrival of the 16,000-TEU CMA CGM Marco Polo, company executive officer Rodolphe Saade told the Hong Kong Shipping Gazette: "I have strong hope that in the next coming weeks we will be in a position to finalise an agreement with the banks where they will give us some more headroom to pay them back."
More than $4.6 billion of its debt is owed to banks while the balance is in bonds. If most of the $400 million loan can be paid through a restructuring, Mr Sirat feels confident that repayment of the next $600-$700 million tranche will be manageable.
CMA CGM recently reached agreement with France's sovereign wealth fund Fonds Strategique d'Investissement (FSI) and Turkish investor Yildirim Group to secure further cash injections with Yildirim having earlier invested $500 million.
State-owned FSI has bought $150 million in bonds redeemable as shares that would give it a six per cent stake in the company. Yildirim has now subscribed to another $100 million in bonds, which if redeemed as stock would become four per cent stake. CMA CGM is also aiming for an IPO, at which stage FSI and Yildirim said they would withdraw.