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Shipper CMA CGM Said to Face July 26 Court Deadline to Find New Investors
CMA CGM SA, the French shipper reorganizing 5.4 billion euros ($7 billion) of debt, is seeking to put together a new investor group by a July 26 court deadline, said people with direct knowledge of the matter.
Butler Capital Partners LLC, a Paris-based private-equity firm, is one of the remaining potential bidders after talks with Qatar Holding LLC and Colony Capital LLC failed, said three people, who declined to be identified because the discussions are confidential. Butler, which would provide about 70 million euros, is talking to parties including CMA CGM agents and France’s FSI sovereign-wealth fund to raise $500 million, one of the people said.
CMA CGM, which began talks with creditors in September, needs the reorganization to avoid insolvency after breaching covenants on most of its debt. The company, the world’s third- largest container shipper, replaced Chief Executive Officer Jacques Saade in December with Philippe Soulie, while Saade remains chairman.
“They’re under some pressure now,” Axel Funhoff, an analyst at Brussels-based ING Group, said in an interview. “Even if the cash-flow situation has eased with the recovery, they need to raise more equity to reassure debt holders.”
It remains unclear whether CMA CGM will be able to reach an agreement with investors before a hearing next week at the Paris court overseeing the reorganization, the people said. CMA CGM could also seek to extend the deadline.
Private Investors
CMA CGM spokeswoman Marianne Benoit and FSI’s Benjamin Perret declined to comment, as did a Butler spokesman.
Under France’s court-sponsored conciliation procedure, a company’s failure to meet the deadline for an agreement with creditors makes it harder to raise new funds and leaves it vulnerable to insolvency if broken covenants are invoked.
Marie-Christine Berneron, a spokeswoman for the Paris commercial court, didn’t return calls seeking comment.
Under an earlier proposal, FSI would contribute a third of the capital if CMA CGM is able to get the remainder from private investors, the people said.
A recovery in global trade helped CMA CGM report an operating profit for the first quarter. The company had a net loss of $1.43 billion in 2009.
Talks with Qatar Holding were at an advanced stage before they broke down this month over conditions imposed by the Qatari fund that could have enabled it to eventually take control of the company, the people said.
Colony, which has withdrawn its bid, said yesterday that it could still be ready to invest alongside the Qatari fund.
“We have always been and we remain 100 percent aligned with Qatar on this transaction,” Owen Blicksilver, a U.S.-based spokesman for Colony, said by telephone late yesterday.
Stephen Benzikie, a London-based spokesman for Qatar Holding, had no immediate comment.
To contact the reporter on this story: Laurence Frost in Paris at lfrost4@bloomberg.net.
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