Zim looks to US$1.4 billion lifeline, sees stability ahead

ISRAEL CORP, the parent of Zim Integrated Shipping Services, is on the verge of closing a financial restructuring deal for the carrier after garnering US$1.4 billion through "understandings and agreements" with banks, bondholders, shipyards and shipowners, which hold 95 per cent of Zim debts.

The next step in the Zim saga will unfold on November 1 when the restructuring plan will be put to vote by Israel Corp shareholders.

"This plan stabilises Zim's financial position, enables it to overcome the current shipping crisis and provide a strong return on Israel Corp's investment," said Israel Corp chief Nil Gilad.

Zim now gets US$500 million in fresh loans over 2009-2010 to purchase ships. Its debt repayments will be rescheduled over 10 years and full or partial grace periods will be granted for up to three years on principle payments.

Another $450 million that will include conversion of existing loans will come from Israel Corp, along with a $100 million safety net.

Repayment of a $350 million bond value has also been postponed from 2012-2015 to 2016, with the carrier given the choice to further defer payments up to 2017-2020.

Zim CEO Rafi Danieli said the financial arrangements concluded with banks and shareholders will help Zim to cash on the recovery and return to profitability being forecasted by analysts over 2010 and 2011.