Israel Corp to Vote Sunday on Zim Rescue

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2009

Israel Corp's shareholders are scheduled to vote Sunday, Nov. 1, on a complex financial restructuring of its ocean container unit Zim Integrated Shipping. The rescheduling of debt, bond obligations and ship charter fees is aimed at covering Zim's anticipated $1 billion deficit over the next four years, which is threatening the carrier's survival.
The shareholders' meeting has been postponed twice to give Israel Corp time to reach agreement with a small minority of Zim's creditors and bondholders who were resisting the restructuring plan.
Israel Corp said bondholders have agreed in principle to defer repayment of principal on some $350 million of bonds in return for receiving higher interest rates. Israel Corp and companies associated with the controlling Ofer family also have made a commitment to provide a $100 million safety net for Zim.
Under the agreement, Israel Corp shareholders will cover $450 million of Zim's deficit, including the $100 million safety net, and bondholders and other unsecured creditors $211 million.
Foreign banks which lent Zim $420 million to partially finance an order for 12 container ships will provide an additional $500 million to complete their construction.
Zim is the world's seventeenth largest carrier with 32 owned and 57 chartered ships with a capacity of 272,543 20-foot equivalent units. It has 27 vessels of 239,498 TEUs on order.
Zim lost $302 million in the first half of 2009 and has laid up around a fifth of its fleet.

Source: Journal of Commerce