CMA CGM profits up 15pc, but debt swells to US$6.8 billion

DEBT has soared at Marseilles-based shipping giant CMA CGM to US$6.85 billion despite a 15 per cent increase in operating profits to $2.16 billion that erased a 2009 operating loss of $1.49 billion.

Paris-based maritime consultants Alphaliner said the big French shipping line has been in breach of certain financial covenants since June 2009, and as of the end of 2010, a total of $3.05 billion of its debt remains in breach.


Alphaliner said that "subject to certain agreements with the company`s creditors, the past breaches are due to be waived this year. This is aided by the significant 2010 recovery and a $500 million injection of fresh capital from the Turkish Yildirim Group, which earlier this year subscribed a bond issue bearing 12 per cent interest.


The recently completed issue of $949 million in senior notes will allow CMA CGM to finance part of its large order book which comprises 25 vessels due to be delivered between 2011 and 2014, said the report.


Separately, CEO and founder Jacques Saade has named his son, Rodolphe, his successor as chairman and CEO. It is not yet known when the elder Mr Saade will step down, but the report said he "has no intention of retiring in the near future."


Philippe Soulie, who acted as the CEO for a year starting from last January left the shipping company in March.