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Global Ship Lease, Inc. Message Board

  • gbrown231 gbrown231 Sep 13, 2012 10:08 AM Flag

    CMA CGM Results

    CMA CGM reported a very strong quarter. They are solidly profitable and will continue to be. Further, it seems that a debt restructuring may occur in ther near term. I'm suggesting reason it hasn't happened yet is CMA hasn't yet decided who to take the required equity component from - Yildrim or the French Sovereign Wealth fund. Seems to me CMA will always be around no matter what because the French Government considers them vital and will make sure they will be one way or another. This being the case, we can infer that GSL leases will always be paid and GSL is a screaming buy here as it generates $1.25 in free cash flow per share with an average contract duration of 8 years. How many companies can you say this about? Frankly, I don't care if they ever pay a dividend because the money is going in our pockets anyway. All the free cash flow is going to pay down debt so every year, in real terms, GSL stock is worth $1.25 more. For those that need that dividend however, isn't it likely that if CMA is able to restructure then GSL will be able to get the LTV covenant waived as they have the same banks? And if not, surely CMA's bond rating will improve thus allowing GSL to do a bond offering to pay down current debt and then pay a dividend. I have to believe Michael Gross wants that dividend. Isn't this the only reason he got involved in this to begin with? To get a better yield on his cash? By the way, I had a question on an earlier post. Doesn't Ian own north of 400K shares?

    Sentiment: Strong Buy

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