Time Running Out for CMA-CGM

It appears CMA-CGM may be running out of time.

In a report today from Lloyds List, talks between Belgian billionaire investor Albert Frere and the shipping line have collapsed. News Agency Wansquare claimed that negotiations had been broken off over differences between the two sides concerning such matters as corporate governance and the appointment of senior personnel.

In this blog, we wrote a column entitled Five Reasons Maersk Line Should Buy CMA-CGM. At the time, the idea was more than a little far-fetched. However, with CMA-CGM past it’s July 26 due date for outstanding loan payments along with the breakdown of talks with the Qatar Group last month, there cannot be too many options left for the beleaguered carrier.

Saddled with over $5 billion in debt due to new building orders, CMA-CGM has to pay for deliveries this year or face possible default. Despite the turnaround in the box industry this year, the French carrier appears to be in so deep that even the vastly improved cash flow cannot help their fortunes. Without badly needed financial restructuring, banks could begin foreclosing on loans and seizing assets.

The carrier was not available for comment in the Lloyd’s report.

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