CMA CGM rejects Qatar loan

Jacques Saade says conditions of the terms the investors were asking were ‘too difficult’

HEAVILY indebted CMA CGM has rejected a loan from Qatar and continues to look for capital from other sources, group chairman Jacques Saadé disclosed this morning.

The terms that Qatari investors were asking were “too difficult”, Mr Saadé told Lloyd’s List during the naming ceremony for the 13,800 teu CMA CGM Christophe Colomb.

He also predicted that 2010 financial results could be one of the best ever for the French line, given the steep recovery in container volumes and freight rates. Nevertheless, the line still needs new loan or share capital to cover its huge newbuilding programme.

News that the Qatar deal had fallen through is likely to come as a surprise to many, as it was seen as almost a foregone conclusion that a loan was imminent.

However, the line was forced to put out a statement two weeks ago denying reports in the French press that it was about to receive $1bn of new investment from the Qatari Investment Authority.

CMA CGM has been looking for ways to raise more capital since last year, with equity stakes among the options under discussion.

CMA CGM chief executive Philippe Soulié said recently that CMA CGM’s debt would still be around $5bn by the year end, although down from the peak of $5.4bn.

Although CMA CGM has gone through a resurgence in business in recent months following a near-death experience and a modest infusion of financing late last year, it still needs additional capital to convince its bankers that it can finance orders slated for deliver through 2012.

“The banks demand it because of the deliveries,” said Mr Saadé. The company must find the financing by the end of July.

The French sovereign fund FSI is prepared to invest in CMA CGM, but only if a second partner is found.

Mr Saadé said there were “many positive discussions” with potential partners, but would not reveal their identities.

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