French shipping firm to enter public equity market
There are major moves happening in the shipping industry in the recent past with France"s CMA CGM, the world"s third largest container shipping line, is set to make its entry in public equity market.
As part of this, it has decided to merge its Global Ship Lease arm with a listed shell company, which will value the resulting company at about $1 billion. The shares" performance will provide a rare sign of market sentiment towards container carriers, as few are listed. The sector ? whose most important sources of traffic are exports of consumer goods from Asia to other Asian countries, Europe and North America ? faces falling demand and rising costs.
GSL is to merge with Marathon Acquisition Corp, a shell company that listed on the New York Stock Exchange in 2006 after raising $309m from investors. It has since been looking for suitable maritime assets to buy.
CMA CGM will hold 23 per cent of the resulting company, which will be named Global Ship Lease.
Under the deal, GSL would repay CMA CGM $170m of loans that it had made to it. The merged company will also take over loans associated with the GSL fleet.
The transaction will help CMA CGM, which operates 300 ships, to pay for its ambitious fleet expansion programme.
CMA CGM has agreed to charter vessels owned by the merged company for between five and 15 years.
GSL will become the third leading listed owner of container ships, after Vancouver-based Seaspan and Athens-based Danaos Corporation. The merged company has said it plans to charter vessels to other container lines as well as CMA CGM.