CMA CGM's Bond Strategy Involving Air France-KLM Shares

PARIS, Dec ‌9 (Reuters) - Shipping group CMA CGM is seeking to raise around ‍325 ‌million euros ($378.3 million) by issuing a three-year bond which it will be ⁠able to reimburse with its ‌shares in Air France-KLM, CMA CGM said on Tuesday.

CMA CGM will also have the possibility of repaying the bond in cash, or through a mix of ⁠cash and Air France-KLM shares, it added.

CMA CGM holds 8.8% of Air France-KLM's capital after ​becoming a shareholder in 2022 when it formed ‌an air freight partnership with the ⁠airline.

The companies scrapped the cargo partnership in early 2024 and a lock-up on CMA CGM's stake ended in February this year.

"CMA CGM ​remains a shareholder of Air France-KLM, confident in its management team, and further retains upside potential in Air France-KLM's share price,” CMA CGM's Chief Financial Officer Ramon Fernandez said in the statement.

"CMA CGM is ​issuing ‍this exchangeable bond that ​it views as a cost-efficient financing allowing the Group to diversify its funding sources," he said.

Under the proposed bond, a reimbursement through Air France-KLM shares will represent a premium of between 30% and 35% over the average price of the shares on December 9, CMA CGM said.

CMA ⁠CGM, the world's third-largest container shipping line, has continued to invest in its own air cargo division ​and extend its footprint in land logistics through its CEVA subsidiary.

CMA CGM and the Saade family, which founded and controls the Marseille-based group, have also invested outside transport by acquiring media ‌assets and by investing in leading French firms like supermarket retailer Carrefour.

($1 = 0.8590 euros)

(Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta and Susan Fenton)