The CMA CGM group will provide €25 million in new money to Brittany Ferries, which is in difficulty due to the coronavirus crisis. The two French shipowners are also talking about a "commercial partnership" for trade with Great Britain. The rapprochement would only be temporary.
CMA CGM and Brittany Ferries have taken advantage of the Assises de l'économie de la mer in Nice to announce the entry of the former in the capital of the latter.
"CMA CGM, the leading French shipping company, is supporting us," said Jean-Marc Roué, chairman of Brittany Ferries.
"It is clear that through this commitment, CMA CGM validates our recovery plan and our business plan over five years," which could facilitate discussions "with other potential investors," added the head of the cross-Channel company.
In concrete terms, the world's number three liner shipping company will subscribe for 10 million euros of convertible bonds of Brittany Ferries and will lend 15 million to the Breton company, repayable after five to eight years, said Jean-Marc Roué.
The Marseille-based shipowner will send a representative to the supervisory board of Brittany Ferries, "but there is no ambition for CMA CGM to be ad vitam aeternam in (the capital of) a tourism company," noted the former president of Armateurs de France responsible.The company must first repay a loan guaranteed by the State of 117 million euros, he recalled.
Space exchange and LNG sector
The agreement also provides for a "commercial partnership" that will promote the use of cargo space available on board Brittany Ferries vessels serving the United Kingdom, Ireland and the Iberian Peninsula.
CMA CGM intends to "strengthen its transport offer in the ro-ro sector on the Atlantic coast and Northern France to Great Britain" and announces new offers to come in this segment.
According to the Marseille-based shipping company, the partnership "will also enable Brittany Ferries to develop its expertise in the field of freight and logistics".
CMA CGM's management believes that it "will help the company to adapt more easily to post-Covid-19 trends" in freight, notably in the field of driverless trailers, "and to propose a new transport offer to better meet its customers' needs".
The two shipping companies have announced their intention to "pool resources around LNG in the areas of French crew training and safety procedures", in order to develop a French industry of excellence dedicated to gas.
Both companies are committed to "greening" their fleets. Brittany Ferries has just ordered two hybrid electric/natural gas ships, in addition to the LNG-powered "Salamanca" and "Santoña" expected to start operating next year.
Long in the red, CMA CGM, is taking full advantage of a good period for the regular shipping line created by the Covid-19 crisis, with a net profit approaching $3.5 billion in the second quarter of 2021.
Affected by the Brexit and travel restrictions for travelers, Brittany Ferries has sunk into the red, with a turnover divided by 2.3 last year and a year 2021 "as bad or even worse than 2020," according to Jean-Marc Roué.
After carrying 750,000 passengers last year, the company should receive 530,000 this year, against 2.5 million in 2019, he noted. He hopes however "a recovery" next year, the figure of reservations for 2022 being according to him already "well oriented".
Brittany Ferries operates ships between Roscoff, Saint-Malo, Cherbourg, Caen-Ouistreham and Le Havre on the one hand, the south of England and Ireland on the other hand, but also between Ireland, England and Spain.
FA with AFP