French shipping giant CMA CGM Group has agreed to convert its previous financial support for Brittany Ferries into an equity position in the operator of ferries between France, the UK, Ireland, and Spain. Brittany has been working to recover its business after the pandemic and the impact of Brexit on its cross-channel routes while CMA CGM calls it a commercial cooperation citing opportunities to expand the freight service.
CMA CGM agreed to provide €25 million in investment support to Brittany Ferries in September 2021 to aid with the company’s post-Covid 19 recovery. The investment consisted of €10 million in convertible equity and €15 million loan. At the time, CMA CGM said it was the start of a partnership to “unlock synergies” between the two companies, including the freight business as well as to promote cross-channel shipping.
Executives of both companies confirmed to the French press and the news service Agence France Press an agreement to convert CMA CGM’s financial support into an equity position in Brittany Ferries. CMA CGM will gain up to a 12 percent capital position in Brittany Ferries.
The ferry company yesterday released its year-end financial results which while doubling revenues to €444.7 million showed a 26 percent decline in overall passenger totals and a 17 percent decline in freight volume. Passenger routes between the UK and France were especially hard hit. Passengers between Portsmouth and Le Harve were down 95 percent and Portsmouth and Cherbourg were down 58 percent, while other routes were down 22 to 35 percent for a total decline of 35 percent on cross-channel traffic. The company has been working to expand its business out of Ireland which shows a 48 percent increase in passenger traffic.
Reports in the French media suggest Brittany Ferries had been looking for as much as €50 million in additional investments and is still looking for an additional €15 million.
In the financial report, the management of Brittany Ferries said looking ahead, the company remains confident. Bookings they reported are up by 23 percent so far this year pointing to a recovery towards pre-Covid business volumes. In addition, the entire Brittany Ferries fleet of 10 mixed passenger-freight ships will be deployed from the end of this month.
Brittany had said when CMA CGM first invested that it looked to gain more expertise in freight and logistics from the cooperation. In January 2022, the first cross-Channel shipment of CMA CGM containers was completed aboard Brittany Ferries’ Cotentin. They were carried between Le Havre and Portsmouth as part of a new fast lane service CMA CGM was promoting. They also reported that conventional articulated truck loads had been carried on Brittany Ferries’ Portsmouth – Caen route.
The investment into Brittany Ferries comes a month after CMA CGM announced it was planning to acquire another French ferry company, La Méridionale. This investment they said was also to help the ferry company to recover from the impacts of the pandemic. The company reported that the goal was preserving the regional identity of La Méridionale and ensuring territorial continuity between France and Corsica and continuing links to Morocco. CMA CGM said it intends to turn around and restore growth prospects to La Méridionale.