October 28, 2010 / 2:00 PM / in 7 years

UPDATE 2-France sovereign fund mulls shipping firm investment

* FSI looking at CMA CGM co-investment -spokesman

* CMA CGM already has Yildirim deal -sources

* Yildirim working with Garanti on financing -sources

(Adds details on Yildirim deal, financing)

By Julien Ponthus and Sarah White

PARIS/LONDON, Oct 28 (Reuters) - France’s sovereign wealth fund is considering an investment in indebted French shipping company CMA CGM alongside Turkish conglomerate Yildirim, a spokesman for the fund said on Thursday.

Marseille-based container shipping line CMA CGM, which began talks with lenders a year ago on over $5 billion of debt after being hit by an industry wide slump, has already agreed a $500 million investment from Yildirim, according to three sources close to the deal.

That agreement was key to unlocking funding from the Fonds Strategique d‘Investissement (FSI), which said earlier this year it would invest in CMA CGM if it found another industrial investor.

“We were officially asked a few days ago by the Saade family to look at a possible joint investment with investor Yildirim,” the FSI spokesman said. “We are working on it, and we will come back to CMA CGM quickly, in the coming weeks.”

Yildirim might eventually get a 20 percent stake in CMA CGM, which is controlled by the Saade family, according to one of the sources, adding that the deal should be completed by mid-November.

“We will communicate when an agreement has been signed,” a spokesman for CMA CGM said.

Yildirim, itself a family-run commodity trading, mining and shipping conglomerate, is working on raising financing for its investment. Garanti Bank (GARAN.IS) is the lead lender on the deal, according to two sources close to the funding.

“This is an all Turkish deal -- the Yildirim Group is putting up part of the financing and the rest from a group of Turkish banks,” another person close to the company said.


CMA CGM is also seeking to round off debt restructuring talks with its banks in the next month, another source close to those negotiations told Reuters.

While banks continue to hammer out terms on the price they will receive on their loans, the basic framework for a deal has been agreed and an agreement could be drawn up in the next two to four weeks, the source added.

Lengthy discussions with creditors were complicated as about 40 different syndicates of banks are involved. Negotiations have been through a committee of syndicates, although some lenders are holding talks independently.

CMA CGM’s quest to find an industrial investor has seen some talks fall through. Private equity firm Butler Capital Partners, Belgian billionaire Albert Frere and sovereign-backed Qatar Investment Authority have all considered a stake.

After making losses last year, CMA CGM is expecting to post an operating profit for 2010, the company has said. (Additional reporting by Jackie Cowhig; Editing by Jon Loades-Carter)

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