Zim secures 'golden' future

Israeli container line Zim has struck a deal with the government that paves the way for shipping alliances and a long-promised IPO.

A $3bn restructuring plan has been finalised, with $1.4bn of debt converted into equity "following a protracted and complex series of negotiations," it said.

A key part of the deal is the ministry of defense's approval for a change in the terms of its 'golden share' in the company, "eliminating provisions that stand in the way of implementation of the restructuring agreement."

This includes likely tie-ups with other lines and a long-mooted IPO. New ship orders could also be in the pipeline with funds from capital-raising exercises.

CEO Rafi Danieli said: “The ‘New Zim’ with its strong balance sheet is well placed to open a new exciting chapter in its development.”

The restructuring agreement is still subject to creditor and shareholder approvals, including a vote at its owner, Idan Ofer-controlled Israel Corp (IC).

IC is investing another $200m and providing a liquidity line of $50m.

It is also writing off loans of $225m.

Other related companies are supporting Zim by amending charter contracts and scrapping loans worth $180m in total.

All this means that IC and affiliates will have offered total support of $1.4bn from the start of the financial crisis.

Its stake will be reduced from 100% to 32%.

The new company has been valued at between $600m and $800m.

Danieli added: “We are delighted to have reached these agreements after many months of hard work.

"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."