Zim files to raise up to $360m in secondary offering

Eli Glickman  picture: Tamar Mitzpi

The Israeli shipping company will not issue any new shares or receive proceeds from the offering as shareholders seek to profit from the share price's sharp rise.

After its share price has risen more than 200% since its IPO on Wall Street in January, Zim Integrated Shipping Services Ltd. (NYSE: ZIM) has filed with the US Securities and Exchange Commission (SEC) to raise between $312-360 million in a secondary offering, according to the current share price.

Zim itself will not issue any new shares or receive proceeds from the offering as existing shareholders seek to profit from the share price's sharp rise. Existing shareholders will sell 6,730,583 ordinary shares and will grant the underwriters a 30-day option period to purchase up to 1,009,587 additional ordinary shares.

Citigroup, Goldman Sachs & Co., and Barclays are acting as global coordinators and Jefferies and Clarksons Platou Securities are acting as joint bookrunners for the offering.

The ZIM shareholders selling shares are KSAC Europe, Danaos, Deutsche Bank, Julius Baer and ELQ Investors but Kenon Holdings (NYSE: KEN; TASE: KEN), controlled by Idan Ofer, which is the largest shareholder with a 27.8% stake, will not sell any shares. KSAC, Danaos and Deutsche Bank invested in Zim before its January IPO.

Two weeks ago Zim reported its first quarter 2021 results. Zim reported revenue of $1.7 billion, up 112% from the first quarter of 2020, and above the analysts' predictions of $1.6 billion. The company reported a net profit of $590 million in the first quarter of 2021, compared with a net loss of $11.9 million in the corresponding quarter of 2020, when the Covid-19 crisis began. Zim generated cash flow of $777 million from operations in the first quarter of 2021, compared with $102 million in the first quarter of 2020.

Zim president and CEO Eli Glickman said, "Zim is one of the most profitable companies in Israel and the most profitable in the global shipping container industry, in terms of EBITDA profit margins. But years ago there was a question mark about the company's existence."

Glickman was referring to the fact that Zim negotiated debt settlements in 2009 and 2014, with a 50% 'haircut' in the latter.

Following the announcement about the secondary offering, Zim's share price is down 4.75% on the NYSE today, giving a market cap of $5.08 billion.

Published by Globes, Israel business news - en.globes.co.il - on June 1, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Eli Glickman  picture: Tamar Mitzpi
Eli Glickman picture: Tamar Mitzpi
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018