Sources inform ''Globes'' that Idan Ofer will inject $100 million into foundering Zim Integrated Shipping Services Ltd. -the safety net promised Zim's bondholders when Ofer Holdings Group injected $550 million into the company as part of the $3 billion debt settlement two years ago. Half the capital injection will come from Idan Ofer's private companies, and half from Ofer Holdings' subsidiary Israel Corporation (TASE: ILCO), which directly owns Zim.
The 2009 debt settlement called for the rescheduling of payment to over 20 creditors, mostly foreign banks, and included $800 million to Zim's bondholders. The safety net promised by the Ofers would be activated automatically if Zim's financial situation worsened, in order to improve the company's liquidity.
The conditions for the activation of the debt settlement included a going concern warning by Zim's auditors, a new request for a debt settlement, or missing a debt payment. Although Zim has not officially requested a new debt settlement, the original agreement stated the concern that one of the conditions might materialize was sufficient grounds for activating the safety net.
Zim bondholders told "Globes" that the company has not discussed its condition with them, but if it is in as bad a shape as indicated by the shipping industry, they welcome the activation of the safety net. One bondholder told "Globes", "We haven’t received any official notice about problems, but Zim made certain promises in the debt settlement, and we expect it to meet them."
Zim's bondholders include Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), and Amitim, which manages the eight nationalized old pension funds.
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2011
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