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Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Credit

<p>Considering that CMA CGM has yet to announce the funding methods for the Public Tender Offer, regulatory requirements deal parameters and the final proportion of CEVA shareholders tendering would only be known when the deal is complete. These factors can have a significant impact on the deal and the credit health of CMA CGM assuming that the deal will be mostly funded by debt. While CMA CGM has sufficient cash on hand as at 30 September 2018 to fund the acquisition, we think liquidity looks tight given the company’s working capital requirement that is funded by cash and expect CMA CGM to seek external financing. The company is also an unlisted entity which makes it more challenging for CMA CGM to seek equity fundraising, while there has been no news about existing shareholders pumping in new money in support of the deal. This can stretch the gearing level and will most likely put pressure on CMA CGM’s credit profile. We also believe several factors are in play, including, opex and capex cost impact from the IMO regulations, increased capex burden due to newbuild vessels and effect from wild card ‘US-China trade war’. We maintain our attractive view on the EUR 750, 5.25% issue. With prices at their lower end and yields at their higher end, we believe this issue</p>

Considering that CMA CGM has yet to announce the funding methods for the Public Tender Offer, regulatory requirements deal parameters and the final proportion of CEVA shareholders tendering would only be known when the deal is complete. These factors can have a significant impact on the deal and the credit health of CMA CGM assuming that the deal will be mostly funded by debt. While CMA CGM has sufficient cash on hand as at 30 September 2018 to fund the acquisition, we think liquidity looks tight given the company’s working capital requirement that is funded by cash and expect CMA CGM to seek external financing. The company is also an unlisted entity which makes it more challenging for CMA CGM to seek equity fundraising, while there has been no news about existing shareholders pumping in new money in support of the deal. This can stretch the gearing level and will most likely put pressure on CMA CGM’s credit profile. We also believe several factors are in play, including, opex and capex cost impact from the IMO regulations, increased capex burden due to newbuild vessels and effect from wild card ‘US-China trade war’. We maintain our attractive view on the EUR 750, 5.25% issue. With prices at their lower end and yields at their higher end, we believe this issue

CMA CGM: Credit Metrics Improved on the Back of Rising Profitability; Strong Liquidity

CMA CGM SA

CMA CGM: Credit Metrics Improved on the Back of Rising Profitability; Strong Liquidity