CMA CGM Seeks Credit Line

Ocean carrier CMA CGM is looking to shore up company operations with a $400 million loan as the carrier attempts to restructure its $5.6 billion in debt.

The family-owned Marseille, France-based carrier is looking for the additional credit line as founder and CEO Jacques Saadé has reportedly agreed "in principle" to changes in governance demanded by creditors that hold $4 billion of the firm's outstanding debt, according to French weekly business magazine Challenges. These changes include Saadé's ouster, an agreement to look for outside investors and renegotiation of 49 outstanding ship construction orders.

Two weeks ago, when media reports of the creditors' demands for his ouster surfaced, Saadé openly denied them.

“I can’t imagine that any of our financial partners would try to take advantage of this period,” Saadé said, especially considering that CMA-CGM expects to move into the black “in coming months.”

CMA CGM, the third-largest carrier in the world, spent $1.2 billion in operating expenses during the first half of the year. The firm reportedly had remaining reserves as of June 30 of $599 million, or $601 million short of the total amount needed to operate in the first six months of the year.

Maersk Seeks to Rejoin Trans-Pac Pact

Ocean carrier Maersk plans to rejoin the Trans-Pacific Stabilization Agreement, an industry discussion group of ocean carriers covering the majority of trans-Pacific cargo volume.

Maersk, the world's largest ocean carrier, left the group in 2004 over disagreements with TSA decisions regarding rates and stabilization in the trans-Pacific routes. The TSA has been trying to woo the carrier back since. Since a reorganization of the group in 2007 under Neptune Orient Lines CEO Ron Widdows, the TSA has attracted or lured back the world's three largest carriers, including Maersk, MSC and CMA CGM.

Maersk's membership would bring the TSA roster to 15 carrier members and boost the TSA's coverage to more than 90 percent of trans-pacific cargo.

The TSA, which is allowed under the auspices of federal maritime law to provide a legal forum for carriers to discuss such things as cost-savings measures and rates, cannot formally set rates or assign capacity.

The move by Maersk, which supporters believe will help bring more stability to the trans-pacific, comes at a time when trans-Pacific carriers have suffered losses on the order of $3 billion.

Hanjin Shareholders Approve Restructure

Seoul, South Korea-based ocean carrier Hanjin Shipping said Wednesday that a board of directors plan to split the firm in two has been approved by its shareholders.

The shareholder-backed plan will see the creation of two firms– Hanjin Shipping, handling shipping operations; and Hanjin Shipping Holdings, handling the remaining business interests including governance, investments, and terminal operations and logistics.

Following the restructuring, Hanjin Shipping will exercise full control over the current shipping interests while Hanjin Shipping Holdings will manage the existing subsidiaries.

The plan, first announced Sept. 16 and awaiting shareholder approval, is envisioned to simplify governance and increase competitiveness.

Shareholders will receive 16 shares of the new shipping firm and 84 shares of the holding firm for each 100 shares of the existing Hanjin Shipping Co. held.

Under the restructuring plan, the current firm will be delisted from the Korean stock exchange on Dec. 1 and the two new firms are expected to be listed by Dec. 29 of this year.

OOCL to Increase Cargo Rates

Shanghai, China-based ocean carrier OOCL on Wednesday, citing ocean freight rates that remain below basic operating and transportation costs, announced ocean freight rate increases effective Jan. 1, 2010.

In a statement, OOCL said that the current rates are "unsustainable for the long term." The increases, described by OOCL as the second phase of its "rate restoration program," will vary depending on the port of egress.

Cargo transiting ports on the United States West Coast will be increased by $480 per twenty-foot container and $600 per forty-foot container.

Cargo transiting US East Coast, US Gulf ports, and all ports in Mexico and Canada will increase by $320 per twenty-foot container and $400 per forty-foot container.

OOCL said that the new rates are required to maintain a viable service level and a comprehensive liner network.