Zim in talks to sell stakes in two companies

If the sales go ahead, the shipping line will receive $150-190 million.

Is shipping line Zim at the start of an asset sell-off? In a laconic announcement which conceals as much as it reveals, the company's controlling shareholder, Israel Corporation (TASE: ILCO), said that "Zim is in advanced negotiations, in accordance with its business plan, to sell its holdings in two different foreign companies engaged in activities ancillary to shipping, which do not own ships."

Zim has not specified which are the companies in question, but says that if the preconditions for executing the deals are fulfilled, the total consideration will be in the range of $150-190 million.

It could be that the sale of the companies is part of the company's plan for meeting its projected cash flow in the next few years, as published in the debt arrangement approved at the end of 2009. Under the arrangement, made after the company accumulated a loss of $768 million in 2008-2009 because of the global crisis in the shipping industry, debts of more than $1 billion were rescheduled, while Israel Corporation injected over $500 million into the company.

Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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