Ofer Holdings Group subsidiary Israel Corporation (TASE: ILCO) is considering revising the structure of the debt settlement for Zim Integrated Shipping Services Ltd. Israel Corp.'s shareholders are to meet today to approve a $575 million capital injection into Zim.
Sources believe that there is little chance that Israel Corp.'s institutional investors will agree to the measure. The company is therefore considering alternatives to the settlement, including a smaller capital injection that the institutional investors will accept.
Capital market sources believe that a smaller capital injection into Zim could come at the expense of future payments by Zim to Ofer Holdings' subsidiary Ofer Shipping Holdings Ltd.
By 2013, the period relevant to the Zim debt settlement, the company is due to pay Ofer Shipping $464 million for the purchase and leasing of ships. From 2014, Zim is due to pay Ofer Shipping an additional $430 million, for a total debt $894 million. Ofer Shipping has already postponed a $150 million payment by Zim to at least 2014, and it will be subordinate to payments to Zim's bondholders.
Israel Corp.'s share fell 1.8% by mid-afternoon to NIS 2,498.
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2009
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