CMA CGM, which is in tough negotiations with South Korean shipyards to delay or cancel orders it placed in 2007 for some 30 new ships, is not laying up any of its vessels and is scrapping “very few”, according to Rodolphe Saadé, who was named executive officer of the French-based carrier on Jan. 18 when his father, the carrier’s founder, relinquished his position as CEO and became the non-executive chairman.
“We are maintaining our fleet, and at the same time, we are taking delivery of newbuildings,” Rodolphe Saadé said in an interview last week.
The big new ships are being deployed on Asia-Europe lanes to replace ships either being returned to their owners at the end of their charters or being cascaded onto other trades, including the trans-Pacific.
CMA CGM is using the new ships to fill out services in Asia-Europe lanes that are slow-steaming at what Saadé calls “super ecospeeds.”
The Marseilles-based carrier has been negotiating on two separate tracks to dig its way out of the financial hole that it fell into during the global recession. It is negotiating with a steering committee of banks to restructure the $5.6 billion it owes to 75 creditor banks on loans it borrowed to finance its extensive book of orders for new ships. It is also in talks with South Korean shipyards about delaying or canceling orders for some 30 ships that are due for delivery in 2012 and 2013.
“The French government has been very helpful in assisting us in our negotiations with our banks and the Korean shipyards,” Saadé said. Another CMA CGM executive officer, Farid Salem, has been in South Korea for several weeks conducting the negotiations. “The negotiations with the shipyards are of course not the easiest. It’s a long process,” Saadé said.
He said CMA CGM wants to delay delivery of 15 of the orders and cancel another 15, but that the number is fluid and can change.
One of its South Korean shipbuilders, Hanjin Heavy Engineering recently sold one of the ships that CMA CGM had ordered, the CMA CGM Kessel, to Cardiff Marine for a reported $41 million. Cardiff then reportedly chartered it out to Mediterranean Shipping Co., which caught the French carrier unawares.
“We heard that Hanjin sold it for a very cheap price, but we were caught by surprise by Hanjin,” Saadé said. “We are looking at protecting the interest of the company and going to (file) lawsuits if need be.”
Hanjin Heavy Industries also has unilaterally canceled some of the new ships it was building for CMA CGM. It said in a statement this month that it canceled the third in a series of four new ships after the French line failed to make final payment. Hanjin said the ship was worth $101.6 million, and that it is in negotiations to sell the vessel to another owner “for a good price.”
Contact Peter T. Leach at email@example.com.