French container shipping giant CMA CGM has announced that a final agreement has been reached between CMA CGM shareholders and Yildirim Group of Turkey.
The agreement should enable CMA CGM to strengthen its equity base and secure the financing of its investment plan.
Under its terms, Yildirim Group will invest US$500 million in CMA CGM by acquiring five-year ORA equity notes giving access to 20 percent of CMA CGM's share capital. Yildirim Group will also be given three seats on the ten-member Board of Directors.
The historic family shareholder will retain a majority interest with 80 percent of outstanding shares and voting rights.
Yildirim Group is an international family-run holding company established in 1963 in Samsun, Turkey. It is currently present in chrome ore mining and trading, ferrochrome production and trading, coal trading, fertilizer production and trading, shipping, shipbuilding, and port management.
"This alliance with Yildirim Group will enable us to strengthen CMA CGM's balance sheet," said Jacques R. Saadé, Chairman of the Board of Directors of CMA CGM.
Robert Yüksel Yildirim, President and CEO of Yildirim Group said he is confident of CMA CGM's potential.
The agreement comes in a favourable environment for the group.
For the first nine months of 2010, revenue totalled US$10.5 billion, up 38 percent over the previous period, while freight volumes rose by nearly 18 percent year-on-year to 6.8 million TEU. The group achieved an operating margin (EBITDA) for the period of 18.5 percent, one of the best performances of its sector.
"These good results are attributable to the Group's strategic choices, reflected in its investment policy in large vessels and its pro-active cost reduction plan, together with the resumption of world trade and in particular, the growth in volumes on the Asia-Europe (up 21.1 percent) and Asia-United States lines (up 15.4 percent) in the first nine months of the year," said the company in a statement.
"After the usual seasonal decline in volumes and freight rates this autumn, the year will end with very good results."
CMA CGM has taken delivery of 12 new ships since the beginning of 2010, bringing the number of owned ships to a total of 92. New ships have also been chartered in, bringing the total fleet to 400 units. In 2011, the group expects to receive nine new owned vessels, including six of more than 10,000TEU.
