Settlement with government reached, Zim focuses on ‘path ahead’

   The container carrier Zim said that it had reached an agreement with the Israeli government about its so-called “golden share” which, among other things, gives the government control over the ability of shareholders to sell large stakes in the company.
   According to Zim, this will allow the company to restructure, it said in a press release. Israel Corp. currently owns 99.7 percent of the company.
   While it did not give details on the settlement, the Israel business newspaper Globes reported that the settlement stipulates “that if Israel Corp. seeks to sell 24 percent to 35 percent of the company and the state objects, then the sides will return to the court to resolve the dispute.”
   Globes also reported that as part of the restructuring agreement, not only will Israel Corp. inject $200 million into the company, its stake will be reduced to 32 percent.
   Zim President and Chief Executive Officer Rafi Danieli, said, “The long-expected completion of the debt restructuring, following 18 months of negotiations with creditors around the world who put their trust in the company, will enable Zim to embark on a new path, with a strong balance sheet and with a debt structure which is in line with the company’s capabilities. We want to thank the creditors and the Israel Corporation for their trust and support.”
   The government was given the “golden share” in Zim when the shipping line was privatized back in 2004 to “to protect the State of Israel’s vital interests in Zim.”
   In a document outlining the restructuring plan, Israel Corp. said the purpose of the share was to protect minimum capacity that will allow effective use of Zim’s fleet in times of emergency and “prevent hostile entities, or entities which could harm the State of Israel’s vital interests, from having any influence over the management of Zim.”
   Zim said, with the agreement, it “will be able from now on to face the many challenges of the global shipping market, focus on profitable trades, adjust lines accordingly and continue with the efficiency and savings programs, as well as achieving the targets of the company’s business plan.”