The plan includes a large cash infusion into the troubled shipper and dozens of layoffs.
Israel Corp. (TASE:ILCO) will inject $350 million into Zim Integrated Shipping Services Ltd. as part of a recovery plan. Last year, Israel Corp., which owns 98.92% of Zim, injected $150 million into the troubled shipper. In a notice to the Tel Aviv Stock Exchange, Israel Corp. said that Zim is expecting a cash flow deficit of $1 billion.
Ofer Bros. subsidiary Israel Corp. will seek approval of the recovery plan at an extraordinary meeting of the shareholders on August 20. In addition to the cash injection, Israel Corp's proposed recovery plan includes layoffs, and a reduction in lease payments for its ships in exchange for convertible bonds. Last month a Swiss investment bank described Zim as "a load around Israel Corp's neck," and many believe that the company is currently worth nothing.
The aim of the recovery program is to get Zim through the current recession and the accompanying steep drop in international shipping trade.
Published by Globes [online], Israel business news - www.globes-online.com - on August 2, 2009
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