Israel Corp's shareholders are scheduled to vote Sunday, Nov. 1, on a complex financial restructuring of its ocean container unit Zim Integrated Shipping.
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.