News Content

Zim creditors settle on complex US$3 billion restructuring deal

ZIM has finalised a US$3 billion restructuring deal, involving a $200 million equity injection from Israel Corporation, which will enable the troubled, debt-ridden carrier to participate in joint ventures and buy new ships.

The Israeli carrier is one of the few deep sea shipping lines not in an integrated alliance covering main east-west trades.

A major shareholder will also provide $50 million in financing and forgo $225 million in loans.

The deal, which still requires relevant creditor and shareholder approval, includes a $1.4 billion debt equity conversion and changes to the so-called golden share held by the State of Israel.

Israel Corp will also reduce its stake from 100 per cent to 32 per cent, subject to creditor and shareholder approval. Related companies also agreed to support the company with $180 million.

Creditor support amounts to $1.4 billion, while the equity value of Zim following the restructuring is estimated at between $600 million and $800 million.

Details of the changes to the golden share terms were not revealed by Zim but it said, once concluded, it would ensure that "national strategic interests are fully safeguarded, while eliminating provisions that stand in the way of implementation of the restructuring agreement".

Last week, workers commandeered a Zim vessel followed by a lockout of Zim's Haifa headquarters. Since then, all parties have agreed to discuss the restructuring.