Move comes after govt declines consent
French shipping group CMA CGM is said to have dropped plans to sell the 50 per cent stake held by its unit CMA Terminals Holding in Adani CMA Mundra Terminal Private Limited (ACMTPL) at Mundra port to China Merchants Port Holdings Company Ltd (CMP) after the government declined consent.
ACMTPL is an equal joint venture between Adani Ports and Special Economic Zone Ltd (APSEZ) and CMA Terminals Holding, a unit of CMA CGM S A, the world’s third largest container shipping firm, that runs a 1.3 million twenty- foot equivalent units (TEUs) capacity terminal at Mundra port, India’s biggest commercial port by volumes handled.
n December 2019, CMA CGM announced plan to sell stakes held by CMA Terminals Holding in 10 port terminals globally to Terminal Link, a joint venture 51 per cent owned by CMA Terminals Holding and 49 per cent by state-owned China Merchants Port Holdings Company Ltd, as part of the efforts to reduce debt.
Closure of transaction
In March 2020, CMA CGM closed the disposal of stakes in eight port terminals to Terminal Link, as part of a first closing, for an all-cash consideration of $815 million. The closure of the transaction for the remaining two terminals, including the one at Mundra, have been delayed for want of approvals from regulatory authorities.
“The management believes that the occurrence of the second closing (covering the last two terminals of Cai Mep in Vietnam and Mundra in India) is likely but is not virtually certain as at December 31, 2020, primarily due to current circumstances related to the COVID-19 situation, which delay approvals or require the granting of additional governmental consents,” CMA CGM said while announcing the financial results for 2020 on March 12.
The Indian government policy forbids Chinese firms or entities with Chinese links from investing in and operating ports and terminals in the country.
“CMA CGM has called off plans to divest its stake in the joint venture container terminal at Mundra port,” said a person having knowledge of the matter.
CMA CGM did not respond to an e-mail sent seeking comment.