Turkey’s Yildirim Group intends to exercise its option to buy another 10 percent stake in CMA CGM, which will bring its ownership of the French liner company to 30 percent.
“We have contractual obligations to do this,” said Robert Yuksel Yildirim, president of the family owned group. “We wanted to do this last December, but CMA CGM delayed this because they wanted to get the company healthier by getting the French government’s FSI inside as an investor to strengthen the company,” Yildirim told The Journal of Commerce in an interview at Marine Money Week in New York.
Yildirim said the carrier will make the decision about taking on the new investment this summer. The group will arrange to make the payment of another $250 million, most likely by October, he said. “It has great potential and good upside,” he said.
Yildirim expects the carrier to make money for 2012 as a whole after its first quarter loss of $248 million. He said the major carriers had cut capacity and regained pricing discipline after “Maersk declared war” on the industry last fall by launching its Daily Maersk service to gain market share of the Asia-Europe trade.
He expects freight rates to remain at current levels through September, after which he said the outlook is less clear.
Yildirim Group stepped in to buy 20 percent of the troubled French carrier for $500 million in November 2010 after CMA CGM failed to reach agreement with the state-owned Qatari investment fund to invest $1 billion.
“I walked in as a fireman to put the fire out,” Yildirim said. “I was the crazy Turkish investor to show how to rescue such a great company.”
He said he became the “most popular kid on the block” after news of the investment was revealed. Certainly that was true at the Marine Money conference, where about two dozen investment bankers, private equity investors and consultants lined up to present their cards to him after his presentation.