"Creditors won't accept Zim's $1.5b haircut"

Zim workers committee chairman Avi Sheetrit added that Zim's decision to move to a Greek port is a death sentence for Haifa Port.

Reports about the $1.5 billion write-off that Zim Integrated Shipping Services Ltd. is considering offering its creditors - half of the company's debt - took even Zim workers committee chairman Avi Sheetrit by surprise. "If they can carry out the haircut that I'm hearing about, it will be a blow. $1.5 billion? I can't believe that it will be accepted," he told "Globes".

"In my opinion, the creditors won't agree to a $1.5 billion write-off, but they'll have to agree to something. After all, the debt is to me too, and I am affected like everyone through my pension, but it's sometimes better to get 70% than to get nothing. Is there another option besides a haircut? They've tried everything. Since 2008, we've been in a mess. It seems that they've concluded that it's either a haircut or close the business on the thousands of families of Zim employees," said Sheetrit.

According to reports, a debt settlement at Zim is closer than ever, after the banks have already agreed in principle to the write-off, even though they will be the biggest losers as a result. However, the Israeli bondholders' representative still opposes the pending deal.

Sheetrit also responded for the first time to Zim's decision to move its transshipment activity (the unloading of cargo at one port to ship it to another port) from Haifa Port Company Ltd. to a Greek port. This is a death sentence to Haifa Port, which will halve its container business. Zim announced the decision because of worries about a strike in Israel. Sheetrit said that he understands the decision, despite his solidarity with the port workers. "Even though I am a union man at Zim, I always try to see to the good of all Israeli workers. But in this case, we're talking about a business decision of a company at a time when it cannot afford to be hurt by a strike. I met by chance Haifa Port workers committee chairman Meir Turgeman, and he didn’t consider leveling accusations against Zim's union either."

Sheetrit unexpectedly said that the ports workers should make concessions in their job terms. "I understand the ports' workers committee and organized labor is important to me, because without it there would be chaos here. On the other hand, I am sure that if the parties sat down like we did, it would be possible to agree on amendments in the labor contracts, which include all kinds of benefits for the workers that may not be suitable for these times. For example, the premium awarded in the days of the old cranes is unsuited to the new cranes that do everything at the touch of a button."

Notwithstanding Sheetrit's veiled criticism of the ports' workers committee, he lambasted the government's conduct, saying, "I see no need to build another port in Israel. There is no work in Haifa, so why build a second port all of a sudden? Minister of Transport Yisrael Katz is acting like a thug seeking to enflame matters, and he's not just doing this at the ports. I saw how he acted when the driving examiners went on strike, and he announced that he would privatize the whole system. Is this how a government minister behaves? Anyone who thinks that privatization is a good thing should look at Zim. We're living at a tycoon's whim."

Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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