CMA CGM SA, the world's third-biggest container shipping company, told bondholders it faces bankruptcy unless they approve a plan to raise more debt.

CMA CGM is asking holders of US$570 million of senior bonds to change the terms of the notes to allow prospective lenders to have first claim on the company's assets in the event of a default, said Paris-based spokeswoman Anne-France Malrieu. Otherwise CMA CGM may be "forced to commence bankruptcy proceedings" and the investors may lose their money, the company said in a Dec. 16 notice to bondholders.

Marseille-based CMA CGM is seeking changes to the terms of its bonds in dollars and euros due 2012 and 2013 as part of an effort to restructure US$5.6 billion of debt and raise new money, according to the notice, which Malrieu confirmed is authentic. The company is in breach of conditions on most of its debt after suffering from a slump in world trade amid the deepest financial crisis since the 1930s.

CMA CGM needs a majority of the bondholders to agree to the proposed changes in the terms of the notes by Dec. 22, according to the notice. Otherwise it said it "may be forced to file for bankruptcy proceedings in the near term, in which case there would be no assurance that CMA CGM would be able to repay" of the senior notes.

A new credit line and plans to refinance US$4.5 billion in outstanding ship orders depend on CMA CGM getting the approval of its bondholders to change the debt terms, according to the notice. The so-called consent solicitation statement concerns the company's 293.3 million euros (US$420 million) of outstanding 5.5 percent bonds due May 2012 and its remaining US$149.8 million of 7.25 percent notes maturing in February 2013, according to data compiled by Bloomberg.