The Israeli container shipping company ZIM says it has finalized a financial restructuring plan that will leave it “strongly positioned for growth.”
Zim also said it had reached an agreement with the Israel Ministry of Defense regarding a revised “golden share” held by the State of Israel.
Zim said, “Changes in the terms of the ‘golden share,’ held by the State of Israel, once concluded, will ensure that national strategic interests are fully safeguarded, while eliminating provisions that stand in the way of implementation of the restructuring agreement.”
Features of the restructuring plan include conversion of $1.4 billion in debt to equity. Israel Corp., which currently owns nearly 100 percent of the company’s shares, will see its stake in ZIM reduced to 32 percent, and other creditors — banks, shipowners and shipyards will now become shareholders. ZIM noted that this change is subject to creditor and shareholder approvals, “including a vote at a General Assembly [Extraordinary General Meeting] of the Israel Corporation.”
Israel Corp. has also agreed to invest an additional $200 million in new equity, provide ZIM with a liquidity line of $50 million, and forgo $225 million of loans that were part of a $1-billion support from 2008-2012.
The new structure “will enable ZIM to compete successfully in the global shipping market. The estimated equity valuation of ‘New ZIM’ is $600 to $800 million.”
ZIM said the agreements, still subject to shareholder, credit committees and regulatory approvals, will enable it “to explore opportunities for strategic partnerships and joint ventures with a view to raising additional capital to fund fleet renewal, IT systems upgrade and further business development."
Rafi Danieli, ZIM's chief executive officer, said, “We are confident that the “New ZIM” with its strong balance sheet is well-placed to open a new exciting chapter in its development.”