Thursday, March 26, 2020

French Container Shipping Giant Disposes of Assets to Chinese Port Management Group

Wholly Owned Terminals Now Move to Joint Venture
Shipping News Feature

WORLDWIDE – In 2013 we revealed how French container shipping giant CMA CGM had agreed to sell almost half of its Terminal Link subsidiary, established in 2001, to port operator China Merchants Holdings (International) Company Ltd (CMHI). Now, having seen the Chinese group restructured as China Merchants Port (CMP), and still retaining that 49% stake in the container handling operation, a further deal between the two has been agreed.

CMA CGM retained its own separate group of 33 port terminals under the CMA Terminals (including APL Terminals) banner which it created in 2012. Now it has announced the first closing of its latest agreement with CMP, with the sale of its stakes in eight port terminals to Terminal Link, resulting in their joint ownership.

In line with the terms and conditions of the agreement announced in December last year this first transaction represents a total all-cash consideration of $815 million. It will enable Terminal Link to expand its geographic footprint and global network, thereby enhancing its business development prospects. This initial disposal includes the following terminals:

  • Odessa Terminal (Ukraine)
  • CMA CGM PSA Lion Terminal (CPLT), Singapore
  • Kingston Freeport Terminal (Jamaica)
  • Rotterdam World Gateway (Netherlands)
  • Qingdao Qianwan United Advance Container Terminal (China)
  • Vietnam International Container Terminal, Ho Chi Minh City (Vietnam)
  • Laem Chabang International Terminal (Thailand)
  • Umm Qasr Terminal (Iraq)

The sale of the last two terminals covered by the agreement between CMA CGM and CMP should be completed by the end of first-half 2020 for an all-cash consideration over $150 million, pending approval by the competent regulatory agencies.

With this transaction, CMA CGM is proceeding with the delivery of its $2.1 billion liquidity plan announced last November. The company says this plan, among others, reduces CMA CGM consolidated debt by more than $1.3 billion by the end of first-half 2020 and allows to extend certain financing facilities maturing during the year.

The French group says it is strengthening its balance sheet amidst the high uncertainty created by the global Covid-19 health crisis. While the crisis has had a limited impact in the first quarter of 2020, the Group expects a decline in volumes, particularly outbound to Europe and the United States. Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, commented:

“This transaction, announced on the 20th of December 2019, is an important step in its $2.1 billion liquidity plan and will allow us to strengthen our balance sheet. Amid the high uncertainty created by the Covid-19 health crisis, the closing of this transaction as previously announced demonstrates the resilience of the CMA CGM Group.”

Photo: The CMA CGM PSA Lion Terminal in Singapore.