Zim’s future in the balance

The situation has been brought about by plans of its parent company, Israel Corporation, to spin off less profitable assets, which could include Zim, into a new separate listed company probably listed outside of Israel.   Such a move would hopefully boost the value of Israel Corp’s core businesses – specialty chemicals maker Israel Chemicals (ICL) and Oil Refineries, Israel’s biggest refinery – and attract a broader range of investors.

Shareholders in Israel Corp would receive a new share in the separated company alongside each of their existing shares.

Described as “the most problematic” of Israel Corp’s companies by Alphaliner, Zim, like many other shipping lines, has high debts, in the region of US$3bn, which needs to be restructured.  At the end of March this year, the shareholders’ equity in the line had a negative value of minus US$155m, with the line likely to continue to lose money this year after posting a net loss of US$112m in Q1-2013.