Israeli State to Lose Control of Zim in $3bn Restructuring Deal

Danieli said ZIM is now poised for new development

The Israeli state is set to loose control of container carrier ZIM who says it has finalised a $3 billion financial restructuring plan with creditors that includes a $1.4 billion debt-to-shares swap.

The deal, which is still subject to a range of approvals, includes a promise from state holding company Israel Corp. (IC) to invest $200 million of new equity in the company, provide a liquidity line of $50 million, and forgo $225 million in loans provided between 2008 and 2012, as well as an agreement by related companies to provide $180 million in support through various methods.

Altogether, support from IC and related parties in recent years will total $1.4 billion, and the restructuring will involve IC reducing its stake in the company from 100 percent to 32 percent.

"We are delighted to have reached these agreements after many months of hard work," said CEO Rafi Danieli.

"We are grateful to IC for all of its support and additional investment and to all our creditors for their efforts to get us to this point and for the support they have given to the management team and the business plan.

"We are confident that the 'New ZIM' with its strong balance sheet is well placed to open a new exciting chapter in its development."

The company also reached a deal with the Israel Ministry of Defense changing terms of the "Golden Share" held by the nation to allow for the restructuring.

The equity value of the company is now estimated at between $600 million and $800 million.

ZIM's net loss rose to $530 million in 2013 from $428 million in 2012 as it absorbed expenses related to restructuring efforts, despite a program to reduce bunker costs and improve efficiency generally.