CMA CGME pays down $1.6 billion NOL purchase loan and seeks further M&A opportunities

CMA CGM seek M&A opportunities

Since completing the acquisition of Neptune Orient Lines (NOL) in June, 2016, CMA CGM has already paid back half of the $1.6 billion borrowed to fund the purchase of the Singapore-based firm.

CMA CGM, the world’s third largest shipping line, announced the acquisition of NOL last December in a $2.4 billion deal that secured their position as market leaders on trans-Pacific routes.

CMA CGM has until August, 2017 to completely repay the loan, used a sale-and-leaseback deal for containers and a securitisation programme in part to keep the agreement with creditors.

The group aims to generate $1 billion from asset sales after reviewing activities at the combined company with a separate 18-month plan to reduce costs by $1 billion by the end of 2017.

CMA CGM had already announced they are looking into further M&A opportunities as they look to tackle oversupply with industry consolidation.

Rodolphe Saadé, Vice Chairman of CMA CGM, said: “With the collapse of Hanjin, there will be a wave of consolidation in the sector and CMA CGM is on the look out for opportunities if they should arise.

“We think that small or medium sized operators are going to go bust or be forced to join large operators like us.”