- CMA CGM plans to sell a piece of Ceva as it faces limited liquidity options.
- The French carrier’s reported core ebit of €1.13bn ($1.28bn) was overshadowed by its annual debt interest bill of €1.39bn.
- Current bond prices would not support the issuance of new bonds .
- CMA CGM currently has six bonds issued, for a combined total of $2.9bn.
- CMA CGM would not retain 100% of Ceva’s equity capital, but would retain a majority stake.
CMA CGM plans to sell a piece of stake in Ceva Logistics, a year after it took over the operator, reports The LoadStar.
What is the reason?
CMA CGM barely a year after it took over the operator Ceva Logistics, could be forced to sell a minority stake in. The reason for its reduction is its growing debt mountain and improving its liquidity position.
The French carrier’s reported core ebit of €1.13bn ($1.28bn) was overshadowed by its annual debt interest bill of €1.39bn.
According to a recent Alphaliner analysis, the French carrier is now faced with increasingly limited options as it bids to reduce its debt. It was noted that, “CMA CGM said the current bond prices would not support the issuance of new bonds and it will consider various options to improve its liquidity position”.
Options to raise cash
The liner shipping analyst said the line’s options to raise cash included:
- The sale of remaining unencumbered vessel and container equipment assets that are valued at about $400m;
- the sale of remaining 17 terminal assets that have not been sold to the China Merchants Ports joint venture; and
- the sale of a minority stake in CEVA Logistics.
Total debt
- CMA CGM currently has six bonds issued, for a combined total of $2.9bn.
- They are due for maturity between September this year and January 2025.
- Total debt is to be repaid within two years amounts to $5.3bn.
According to Alphaliner Investor concerns over CMA CGM’s weak liquidity position saw the price of the carrier’s five-year bonds drop to a low of just 61 cents on the euro, with some $1.2bn of its outstanding bonds coming due in 2020 and 2021.
Will hold majority stake
Loadstar Premium editor Alessandro Pasetti said CMA CGM is seen to have bounced back many times with creative ideas.
CMA CGM chief financial officer Michael Sirat confirmed that CMA CGM would not retain 100% of Ceva’s equity capital, but would retain a majority stake as it was ‘actively’ looking at possible options.
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Source: The LoadStar
