ZIM - Israel
Idan Ofer, Chairman of Israel Corp that owns shipping group ZIM, does not believe in real UK port demand over the next few years.
The shipping industry has been hit very badly and recovery is not in sight - the UK has no strategic position for containers.
The deal may become interesting if the UK government is fully backing it for socio-economic reasons?
Idan Ofer, billionaire from Israel who comerstoned my China focused fund with US$50m before the crisis hit and pulled out, has also problems.
Maybe this can be of interest to us for financing? I know him well, so maybe you have ideas?
Zim Integrated Shipping Services Ltd. a wholly-owned subsidiary of Israel Corporation controlled by Sammy and Idan Ofer's "Ofer Holdings Group", has been suffering from a massive drop in traffic and has had to rely on a rescue package from parent company Israel Corp. The company is anticipating losses of US$1bn
In three weeks, shareholders of Israel Corporation will be convening for a general assembly with a proposal on the table to infuse money into subsidiary Zim Integrated Shipping Services, in a bid keep it afloat. Israel Corporation wants to give ZIM another $350 million.
In a first attempt Israel Corporation failed to persuade enough shareholders. The proposal fell in the general assembly of shareholders vote, after the Israel Securities Authority ruled that institutional investors owning Israel Corporation stock, that also own Zim bonds, could not vote on funneling cash to Zim.
Sammy and Idan Ofer, are bending over backward to assure that this time around the proposal is accepted. They agreed to postpone $150 million in lease payments on ships that Zim rents from their privately owned companies, which covers the rent on the ships from 2009 to 2013. They also decided that of that amount, they would entirely forgo $60 million.
Shipping forecasts predict that the industry will only start to recover in 2011.
During the economic boom ZIM ordered large numbers of new ships and has debt of $7 billion.
Before the crisis ZIM planned to IPO in Hong Kong.
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