CMA CGM Gets $500 Million Credit Line

CMA CGM's bankers on Friday agreed to grant the financially troubled container line a $500 million credit line after Jacques Saadé, the French ocean carrier's founder, agreed to restructure corporate leadership and step down as chief executive officer.

CMA CGM said the cash, which will be available in January, would enable the French carrier to pursue negotiations to restructure its $5.6 billion debt and raise fresh capital from new investors.

The agreement with creditors also "is expected to facilitate ongoing discussions with ... Korean shipyards concerning the cancellation or the postponement of ships on order," CMA CGM said.

CMA CGM, the world's third-largest container carrier, has 59 ships on order and is said to be seeking to cancel contracts with South Korean shipyards for 15 vessels in the range of 3,600 20-foot-equivalents.

CMA CGM said it called an extraordinary shareholders' meeting Dec. 23 to approve changes in the company's legal structure with the creation of a new board chaired by Saadé.

Saadé will become non-executive chairman supported by two new directors, including Denis Ranque, former head of European defense contractor Thales.

The Marseilles-based company will propose the appointment of Philippe Soulie as CEO, flanked by Farid Salem, Rodolphe Saadé and Jean-Yves Shapiro as chief operating officers.

It would be the first time CMA CGM appointed a CEO from outside the company. Soulie is a veteran French businessman who runs Cnim, a Marseilles-based construction company.

CMA CGM said it plans to raise cash by selling stakes to new investors in the second quarter of 2010.

The company did not identify the potential investors, but they are thought to include Louis Dreyfus Armateurs, a French bulk ship owner, French private equity group Butler Capital Partners, and Los Angeles-based Apollo Management, the owner of CEVA Logistics of the Netherlands.

Contact Bruce Barnard at brucebarnard47@hotmail.com.