Israel-based global container company Zim Integrated Shipping Services Ltd. has set terms for its initial public offering (IPO) on the New York Stock Exchange (NYSE). Having improved its financial results with CEO Eli Glickman at the helm, the company plans taking advantage of the market boom to raise up to $382 million, at a company valuation of $2.3 billion.
In its latest filing with the US Securities and Exchange Commission (SEC), the company says it plans to issue 17.5 million new shares at a price of between $16 and $19 per share for a raise of $280-332 million. The underwriters will have an option to buy 2.6 million shares at the same price of the offering within 30 days. If they exercise the option then Zim will raise an additional $42-50 million for a total of $322-382 million.
Such an offering would give Zim a company valuation of between $1.9 billion and $2.3 billion, higher than previous estimates that the shipping company would raise money at a company valuation of $1.5 billion.
The funds raised will be used by Zim for long-term growth initiatives including investments in ships, containers and digital ventures and for strengthening the company's capital structure, increasing financial flexibility and general business needs. Citigroup, Goldman Sachs & Co., and Barclays are acting as global coordinators and Jefferies and Clarksons Platou Securities are acting as joint bookrunners for the proposed IPO.
The offering is not expected to include an offers for sale by existing shareholders. Zim's biggest shareholder is Kenon Holdings (NYSE: KEN; TASE: KEN), which has a 32% stake in Zim that will be diluted to 27.2% after the IPO. Deutsche Bank has a 15.7% stake in Zim, which will be diluted to 13.4%, and Danaos Corporation has a 10.2% stake, which will be diluted to 8.7%. The State of Israel holds a golden share, which prevents Kenon from selling its holdings to third parties.
In the past Zim has carried out debt settlements. The first was in 2009 following the financial crisis when the shipping company was mired in $7 billion worth of debt and the second was in 2014, when the company implemented a more than 50% haircut, chopping its debt to bondholders in Tel Aviv from $3.4 billion to $1.4 billion. At the end of the third quarter of 2020, Zim remained with $1.5 billion in long-term debt and had $350 million in cash.
Published by Globes, Israel business news - en.globes.co.il - on January 20, 2021
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