Israel’s biggest cargo shipping company ZIM announced the completion of its comprehensive debt restructuring, following 18 months of intensive negotiations with all of the company’s creditors.
Israel Corporation’s investment of $200 million of new equity in return for 32% of the shares in ZIM has paved way for the restructuring’s conclusion.
The investor will also provide a $50 million receivables financing facility.
ZIM’s lending banks, ship-owners and bondholders have agreed to support a restructuring plan as a result of which creditors converted approximately $1.4 billion of ZIM’s total $3.4 billion debt and liabilities into a 68% ownership stake in ZIM.
ZIM’s remaining debt will mainly consist of debt secured by vessels with an amortization profile that is linked to ZIM’s business plan and unsecured notes listed on the Tel Aviv Stock Exchange with a maturity of nine years.
In addition, ZIM has restructured its charter payments to ship-owners as a result of which they will be reduced by 46% overall.
ZIM said that its restructuring provides it with a stable, long-term capital structure, adding that it will now focus on the implementation of its business plan, with a view to achieving profitability in the near future.
ZIM’s CEO, Rafi Danieli stated:
“ZIM’s board charted the strategy of managing the complex negotiations towards the comprehensive restructuring agreement on the one hand, while persisting with the efficiency programs, which brought ZIM’s performance, for the first time in many years, to the industry average, on the other.
The Israel Corporation’s willingness to forego its ZIM shares and transferring them to the creditors has been a significant contribution to the restructuring, and the $200 million investment enabled the successful conclusion of the process.”
Press Release; July 18th, 2014