The founder of CMA CGM is to be removed from day-to-day management control over the world’s third-largest container shipping line in a governance overhaul agreed to gain access to a badly needed $500m credit facility.
CMA CGM, based in Marseilles, said the changes, announced on Friday, would allow it to pursue discussions about a comprehensive restructuring of its debt and prepare for investments from outside the founding Saadé family.
Jacques Saadé, who founded the company in 1978 and currently chairs its executive board, will call an extraordinary share-holders’ meeting for December 23 to set up a new administrative board, which he will head.
Philippe Soulié, a veteran French businessman who currently runs Cnim, a Marseilles-based construction company, will take over as chief executive. Denis Ranque, a former chief executive of Thales, the defence company, and Christian Garin, president of the French shipowners’ association, will also join the administrative board, in a sign of the French establishment’s determination to shore up the line.
In September, CMA CGM became the largest of several container lines to announce plans to restructure after a collapse in earnings brought on by falls in traffic volumes and overcapacity. CMA CGM, which had been one of the industry’s fastest-growing companies, lost $515m net on sales of $4.8bn in the first half of this year.
The governance changes appear to have been a condition of its creditor group’s continued support while details of a restructuring plan were worked out. The company’s financial partners had sent out a strong message by reaching the preliminary agreement with the company, Mr Saadé said.
“Our strategy to return to profitable growth is proven to be valid,” he said.
Management control had until now been entirely in the hands of the Saadé family and other members of a small group around Mr Saadé, 72. Mr Soulié will work alongside three current senior executives – Rodolphe Saadé, who is Jacques Saadé’s son; Farid Salem, and Jean-Yves Schapiro. The three will be named as deputy chief executives.
The new credit facility will be made available during January.
As part of the restructuring, CMA CGM would pursue talks with South Korean shipbuilders about either cancelling or delaying delivery of some of its programme of ship orders, one of the industry’s largest, it said.
The company is also known to have discussed with specialist owners of some of the container ships it charters about cutting their charter rates.
Mr Saadé founded Compagnie Maritime d’Affrètement in 1978 after fleeing Lebanon’s civil war. The company subsequently took over state-owned Compagnie Générale Maritime.