CMA Terminals Uses Asset Swap to Divest Russian Investments
France’s CMA Terminals, part of the CMA CGM Group, is using an asset swap as a means of divesting holdings in Russia. The creative non-cash solution is the latest in a series of moves by western companies as a means of moving forward with their promised divestitures while complying with the financial sanctions placed on Russia by the west after the invasion of Ukraine.
CMA Terminals held interests in Russian terminals in the Moby Dik terminal near Saint Petersburg and the Yanino Logistics Park, an inland terminal in the Leningrad region. The investments were held alongside Global Ports Investments, a leading Russian terminal operator which is controlled by the Delo Group. In addition to the interests in the Russian terminals, CMA Terminals also holds an investment in two terminals in Finland that are controlled by the Russian group.
Global Ports reports it has entered into binding agreements with CMA Terminals for the disposition of the Russian investments. CMA will exchange its 25 percent interest in CD Holding Oy, Finland, and 25 percent interest in Multi Link Terminals, Ireland, which owns the Yanino Logistics Park and Moby Dik facilities. In the non-cash exchange, Global Ports will give an additional 25 percent interest in Multi Link Terminals, Finland, to CMA Terminals.
After the exchange, Global Ports and CMA will each hold a 50 percent interest in the Finnish company. Global Ports will have reduced its position in the Finnish terminals from 75 percent while gaining full control of the two Russian terminals.
CMA terminals did not comment on the exchange but Global Ports is highlighting it as an opportunity for it to concentrate on its Russian operations. They said it would also “ensure flexibility in creating value in the rapidly changing Russian stevedoring market.”
This transaction follows a divestiture by APM Terminals reported in August 2022. The Maersk company had held a minority investment in Global Ports alongside the Delo Group. Without supplying terms for the transaction, Maersk reported that it had divested of its interest to the Delo Group following up on a March 2022 announcement that they would divest of their Russian investments and stop service to Russia. Maersk recently said it had completed its exit from Russia.
The financial sanctions forbid western companies from transferring money to Russian companies. The non-cash asset swap permits CMA Terminals to comply with the rules while completing its divestiture.
Other shipping companies have also found themselves caught in the sanctions. Norwegian shipping company Havila recently won a court decision in Great Britain which permits it to gain control of its cruise ships by settling with GTLK which finances the ship through a blocked account. The monies will be frozen until the sanctions permit the transfer to GTLK. Helsinki Shipyards conducted tender offers for two cruise ships it was building financed by GTLK. Those sales permitted Swan Hellenic to obtain clear title to the ships after GTLK failed to make installment payments to the shipyard.