CMA CGM – EUR50m Dubreuil Aero stake a small step in the wrong direction

All, 

Please find our unchanged analysis here. 

The stake in Dubreuil Aero will make little difference to CMA CGM’s liquidity or leverage profile. However, it suggests that the group is once again relaxing its financial discipline, after more than a year of belt-tightening and liquidity measures. For bondholders who “fondly” remember the Ceva acquisition, this surely could look like a sign of potentially bigger things to come. It is also discouraging for bondholders hoping that management would be more focused on getting a new bond deal past the line. With the momentum in the European high yield market turning negative again in September, this is still far from a done deal. We remain long the 2021 and 2022 bonds, but we would be more cautious on the 2025 at these levels. 

CMA CGM yesterday announced the acquisition of a stake in Dubreuil Aero, which operates Air Caraibes in the Caribbean, French Bee (a small low-cost airline) and the HILINE CARGO Air freighter. The transaction will involve the subscription of a 30% stake via a capital increase for EUR50m. CMA CGM justifies the deal on the basis of securing access to air freight capacity.  

See chart below for the reach of Dubreil Aero.  

As always, feel free to reach out if you want to exchange ideas on CMA CGM. 

Juliano 

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Juliano Torii
2 Stephen Street
London W1T 1AN
E: jtorii@sarria.co.uk
M: +44 794 73 56 163 (preferred)

T: +44 203 744 7055www.sarria.co.uk