CMA CGM is seeking to put together a new investor group by a July 26 court deadline, according to Bloomberg News, which cited unidentified sources with direct knowledge of the matter.
Butler Capital Partners, a Paris-based private-equity firm, is one of the remaining potential bidders after CMA CGM rejected offers by Qatari Holding, Qatar’s sovereign wealth fund, and Colony Capital, U.S. private equity investor, according to three people, who declined to be identified because the discussions are confidential.
CMA CGM is also in negotiations with a committee representing its 75 creditor banks about rescheduling payment on principal and interest on $5.4 billion in debt it borrowed from them in the last few years to pay for the new ships it ordered.
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Butler, which would provide about $90 million, is talking to parties including CMA CGM agents and France’s FSI sovereign-wealth fund to raise $500 million, one of the people told Bloomberg.
CMA CGM, which began talks with creditors in September, needs the reorganization to avoid insolvency after breaching covenants on most of its debt. The company, the world’s third- largest container shipper, replaced Chief Executive Officer Jacques Saade in December with Philippe Soulie, while Saade remains chairman.
Bloomberg said it is not clear whether CMA CGM will be able to reach an agreement with investors before a hearing next week at the Paris court overseeing the reorganization, the people said. CMA CGM could also seek to extend the deadline.
Under France’s court-sponsored conciliation procedure, a company’s failure to meet the deadline for an agreement with creditors makes it harder to raise new funds and leaves it vulnerable to insolvency if broken covenants are invoked.
A recovery in global trade helped CMA CGM report an operating profit for the first quarter. The company had a net loss of $1.43 billion in 2009.
Talks with Qatar Holding were at an advanced stage before they broke down this month over conditions imposed by the Qatari fund that could have enabled it to eventually take control of the company, the people said.
Colony, which has withdrawn its bid, said yesterday that it could still be ready to invest alongside the Qatari fund.
“We have always been and we remain 100 percent aligned with Qatar on this transaction,” Owen Blicksilver, a U.S.-based spokesman for Colony, told Bloomberg.
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