Israel Corporation (TASE: ILCO) subsidiary Zim Integrated Shipping Services Ltd. is seeking to improve its debt structure in view of the ongoing doldrums in the shipping industry and the company's heavy debt. Sources inform ''Globes'' that Zim has hired Goldman Sachs to advise it on its debt structure.
Zim has joined the lengthening list of companies that have sought external help to analyze their debt structure, advise which debts can be rescheduled, and to negotiate with various creditors to reach arrangements.
Zim's financial commitments totaled $2.2 billion at the end of September 2008, while its shareholders' equity amounted to $736 million out of a balance sheet total of $3.6 billion.
Zim took out a large part of its debt in order to carry out a massive expansion plan to double its carrying capacity. The plan included the purchase of 22 ships and other equipment at a cost of $3.1 billion, with the goal of putting the company back among the world's top ten shipping companies. However, the global recession has turned the grandiose plan into a millstone around its neck, and Zim is now seeking to change it.
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2009
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