Debts of 350 million dollars will be paid up to 2020 in exchange for higher interest rate. Zim will be given new bank finance of over $500 million for a period of 12 years
Israel Corp., the holding company of Zim Integrated Shipping Services, reached an agreement with its bondholders Sunday night according to which, debts of 350 million dollars, which were meant to be paid off between 2012 and 2015, will only be paid in 2016, and with an option to push it further until 2020.
In exchange, Israel Corp, owned by the Ofer family, will raise the annual interest rate from between 0.4 and 1.2 percent and exchange of part of its loans to shares at a discount price.
This is in addition to the $100 million safety net given to Zim, of which Israel Corp.'s share is $75 million, with the Ofer group providing the other $25 million. Israel Corp. is also expected to approve another $50 million in standby aid.
The Israeli and foreign banks, to which Zim owes over $1.5 billion, have agreed to reschedule debt repayments over periods of up to ten years, and also to grace periods of up to three years. Also, Zim will be given new bank finance of over $500 million over a period of up to 12 years.
The deal paves the way for a final approval of a recovery plan in which Israel Corp. will transfer 450 million dollars to Zim, spread out the payment of its debts to creditors and, as mentioned, get half-a-billion dollars in bank funding.
Israel Corp. announced that it was postponing the shareholders' meeting scheduled for October 28 to November 1 in order to make sure the deal is ready for approval.
Zim's recovery plan also involves cancelling and delaying box ship orders, returning vessels when their charters expire and shrinking its network and payroll.
Zim said lately it had reached deals to delay deliveries of four 10,000-TEU ships and nine 12,600-TEU ships until 2014 or 2015. The carrier said that would allow it defer payments due on the ships of up to $2 billion.
