Zim has finalised the terms of its US$3bn financial restructuring arrangements, including a US$1.4bn debt equity conversion with creditors.
Alphaliner reports that the final deal includes an injection of US$200m in new equity and another US$50m in a fresh credit line by the Israel Corporation, which will also forgo US$225m of loans to Zim made during 2008-2012. The Israel Corporation’s stake in Zim will be reduced from 100% to 32%, as it bears the brunt of the cost of the financial restructuring.
The Israel Corp’s controlling shareholder, Idan Ofer, will also separately forgo US$180m in loans and amended charter rates on ships leased from XT Shipping (formerly known as Ofer Shipping). In exchange, Zim’s creditors will write off some US$1.4bn in existing debt for a 68% equity stake in the company. The estimated equity valuation of ‘New Zim’ is US$600-800m, compared to a negative equity position of -U$582m at the end of 2013.
The plan is subject to relevant creditor and shareholder approvals including a vote by Israel Corporation shareholders.