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Morocco: Comanav Privatised

This week, another step forward was taken in the government's ambitious privatisation programme, with the sale of Compagnie Marocaine de Navigation (Comanav), Morocco's leading passenger maritime transport and shipping firm.

Following the sale of Maroc Télécom to Vivendi, of Société Marocaine des Constructions Automobiles (Somaca) to Renault and of Régie Marocaine des Tabacs to Altadis, the privatisation of Comanav was achieved by the French container shipping group CMA-CGM (Compagnie Maritime d'Affrètement- Compagnie Générale Maritime) on March 30.

Over the past ten years, Moroccan authorities have sold off 70 state-owned companies, an estimated 82% of overall government-owned companies, cashing in over $8bn from overseas investors.

The ministry of finance and privatisation concluded the bidding process by selling the company for Dh2.25bn, slightly above the minimum price fixed at Dh2.2bn.

Although 13 operators - including international players such as France's Veolia, Italy's Grimaldi and Spain's Transmed - had expressed interest in the bidding process that started January 22, only two groups actually participated. The Saudi group Saoudy Maritime Co. for Navigation, which offered a slightly lower price than CMA CGM, lost the bid.

Comanav's shares are divided between a direct government stake of 44.5% and stakes held by the public Caisse de dépôt et de gestion (23.43%), the Office Chérifien des phosphates (7.7%) and the Office de commercialisation et d' exportation (0.66%). The private Banque marocaine du commerce exterieur (BMCE) also agreed to sell its 23.6% stake in Comonav. While BMCE and Caisse de dépôt et de gestion will receive their share of the sale, the other stakes will flow directly into the budget, partly to finance the Hassan II fund for social and economic development.

Following its restructuring over the past two years, including voluntary redundancies and a revaluation of its shipping fleet, Comanav currently operates 16 container ships, employs over 1500 people and registered a turnover of _180m in 2006, and a profit margin of _9.1m.

"The arrival of a large group such as CMA-CGM will allow Comanav to strengthen its development programme, encourage a wider opening on the international level and a widening of the services offered by the Comanav, as well as reinforce its investment programme," Toufik Ibrahimi, the president of Comanav told OBG. "In addition, our passenger traffic operations will add an interesting dynamic to the Franco-Lebanese group," he added.

Adding to its attractiveness, Comanav has a 20% stake in the consortium that is building and operating the second terminal at the new port of Tanger Med - alongside Eurogate (40%), CMS (20%) and CMA-CGM (20%). The first terminal is due to be operational in July 2007 and the second one in May 2008.

Active in passenger transport, freight and port activities, Comanav stands to benefit from the liberalisation of the maritime transport sector.

CMA-CGM, the third biggest container shipping company globally - behind Denmark's Maersk and Italy-Switzerland's MSC - with a turnover of over _5bn, has been pursuing an aggressive acquisition spree over the past two years, having taken over successively Dextra Maghreb, Dextramar, Delmas and Sud Cargo. Employing over 300 people in its Moroccan operations, the company is involved in the second terminal of the Tanger Med project, having lost the bid for the first terminal.

"Our interest in this company (Comanav) comes in line with our strategy aiming at reinforcing the group's Moroccan positions, both in terms of transport and of port activities," Jacques Saadé, the president of CMA-CGM said on March 23. "North Africa is now opening its doors to privatisations," he added.

Incorporating Comanav into its operations, the French shipping firm will expand its already large shipping capacity, which stood at over 300 ships with a global shipping capacity of 600 000 TEUs (Twenty Ft Equivalent Units) and operating over 80 routes globally. Comanav's operations will find new markets through the global reach of its shareholders.

© Oxford Business Group 2007