Struggling French ocean carrier CMA CGM, which has warned of possible bankruptcy if it cannot quickly restructure its finances, has reached an agreement with financial partners to obtain a $500 million credit line at the start of the New Year.
Part of the credit deal includes the ouster of founder Jacques Saadé as CEO, though he would remain with the firm, if approved by shareholders, as the chair of a new Board of Directors. CMA CGM, the world's third largest ocean carrier, has been attempting to restructure $5.6 billion in debt and raise new operating capital.
The credit line, said CMA CMG officials, would give the firm enough breathing room to “to pursue the current talks regarding its debt restructuring and a capital increase planned for the 2nd half of 2010 with the arrival of new investors.”
In addition, the financial agreement is “expected to facilitate ongoing discussions” with Korean shipyards regarding possible cancellation or postponement of ships on order by CMA CGM. The carrier said Monday that it has indeed canceled at least 15 of the 45 vessels it has on order. And while another 15 vessel orders are likely to be deferred for the time being, the carrier said it still planned to take delivery on the largest of the vessels it has on order.
CMA CGM officials have called for an emergency shareholders meeting for December 23 to vote on changes to the firm's legal structure, including the creation of a Board of Directors with Saadé at the helm. Shareholders will be asked to include members of the current supervisory board, Pierre Bellon and Tristan Vieljeux, on the Board of Directors, as well as new independent members Denis Ranque and Christian Garin.
“Following the approval of the reinforced organization, Jacques Saadé will propose to the Board the appointment of Philippe Soulié as Chief Executive Officer,” the firm said in a statement released Friday. “Furthermore, Farid Salem, Rodolphe Saadé and Jean-Yves Schapiro should be appointed as Chief Operating Officers.
