CMA CGM reached agreement to establish a committee of French, European and international banks that will help it restructure its troubled balance sheet, the company said Tuesday.
The French carrier, the world’s third-largest container line by capacity, met with its creditors in Paris on Sept. 25 to ask for a moratorium on its debt. The group of banks, which includes major financial institutions from Asia and the Republic of Korea, discussed measures that CMA CGM said will ensure its “continuing development.”
The shipping line, which is owned by Jacques Saade and his family, said the bank committee will propose measures to resolve the carrier’s short and medium term financing requirements and strengthen its capital structure.
The Marseilles-based carrier said regular working sessions of the committee are already scheduled. It said it aims to reach an all-encompassing agreement with the help of the committee by the middle of November.
The French carrier has 60 large new container ships on order that are scheduled for delivery through 2012 and accumulated a debt of $5 billion on which it is no longer able to meet payments, according to the French journalists’ Web site econostrum.info, which said CMA CGM is asking its creditors to freeze the repayments for one year.
As part of an effort to conserve cash, CMA CGM said it will continue to try to renegotiate and in some cases cancel “certain ship deliveries.”
CMA CGM has a fleet of 91 owned and 272 chartered ships with a combined capacity of 1,024 million 20-foot equivalent units.
The French carrier said the French government “is aware of this initiative and will be kept regularly updated on the progress made.”
CMA CGM has been hit hard by what it called “severe market conditions” in the first half of 2009, which have seen record decreases in freight rates and shipment volumes on all main shipping lines around the world.
In 2008, CMA CGM earned a profit of $123 million, down 87 percent from the prior year, on revenue of $15 billion. It is expected to post a loss for 2009.
“The level of activity began to improve again during the third quarter of this year and, so far this recovery is sustained in the fourth quarter,” the carrier said in today’s announcement.
“Forecasted load factors and freight rates for the beginning of 2010 suggest a possible continuation of these recent positive trends,” it said.
Saade said the company expects to break even, or make a profit, in the first quarter of 2010.
The French carrier, the world’s third-largest container line by capacity, met with its creditors in Paris on Sept. 25 to ask for a moratorium on its debt. The group of banks, which includes major financial institutions from Asia and the Republic of Korea, discussed measures that CMA CGM said will ensure its “continuing development.”
The shipping line, which is owned by Jacques Saade and his family, said the bank committee will propose measures to resolve the carrier’s short and medium term financing requirements and strengthen its capital structure.
The Marseilles-based carrier said regular working sessions of the committee are already scheduled. It said it aims to reach an all-encompassing agreement with the help of the committee by the middle of November.
The French carrier has 60 large new container ships on order that are scheduled for delivery through 2012 and accumulated a debt of $5 billion on which it is no longer able to meet payments, according to the French journalists’ Web site econostrum.info, which said CMA CGM is asking its creditors to freeze the repayments for one year.
As part of an effort to conserve cash, CMA CGM said it will continue to try to renegotiate and in some cases cancel “certain ship deliveries.”
CMA CGM has a fleet of 91 owned and 272 chartered ships with a combined capacity of 1,024 million 20-foot equivalent units.
The French carrier said the French government “is aware of this initiative and will be kept regularly updated on the progress made.”
CMA CGM has been hit hard by what it called “severe market conditions” in the first half of 2009, which have seen record decreases in freight rates and shipment volumes on all main shipping lines around the world.
In 2008, CMA CGM earned a profit of $123 million, down 87 percent from the prior year, on revenue of $15 billion. It is expected to post a loss for 2009.
“The level of activity began to improve again during the third quarter of this year and, so far this recovery is sustained in the fourth quarter,” the carrier said in today’s announcement.
“Forecasted load factors and freight rates for the beginning of 2010 suggest a possible continuation of these recent positive trends,” it said.
Saade said the company expects to break even, or make a profit, in the first quarter of 2010.