ZIM Saves $1.4 Billion Through Cancelled and Postponed Ship Orders

Zim is Israel's largest container shipping company

Israeli shipping line ZIM Integrated Shipping Services Ltd. (ZIM), said it has made the "significant achievement" of cancelling orders for newbuildings, and has also received a partial refund on advanced payments it made for the vessels.

In addition, the company said it reached an agreement regarding the postponement of payments due in 2013 for other orders, and in total has relieved itself from "off-balance sheet obligations" amounting to $1.4 billion.

Zim said it had managed to immediately cancel orders for 5 vessels, postpone delivery of an unspecified number of other vessels to 2016, and is waiting on approval from shipyards to cancel an additional 4 orders.

A total of $30 million will be refunded for the cancelled orders, but it did not elaborate on what proportion of the advanced payments the refund represents.

However in total, Zim said the agreements postpone or cancel payments due in 2013 amounting to $235 million.

Zim, Israel's largest container shipping company, has struggled in recent years with losses in 2008 and 2009 resulting in it needing a $450 million cash injection to avoid bankruptcy.

That was followed by a 2010 profit of $54 million before it sunk to a loss of $397 million in 2011, at the time having lost a total of almost $1.1 billion over the 4 year period.

However in December the shipping line posted a strong result for Q3 2012, saying it was the best results since Q3 2010.

In February it reached a new bunker agreement with Israel's Oil Refineries Ltd. (ORL), with ORL saying at the time that without the agreement, its "sale of bunker fuel in Israel is expected to decline."

Israel Corp. owns 99.7 percent of ZIM, and has a 37 percent interest in ORL.