Zim owners lay out restructure plan

Zim owners lay out restructure plan    Israel Corp., the parent of the Israeli shipping line Zim, has laid out its restructuring plans to surface from a crippling lack of cash caused by low ocean freight rates and a sizable fleet expansion plan.
   In a note to the Israeli stock exchange, Zim parent said it would seek to extend loan periods from its creditors, and most notably, given ship owners from which it charters a stake in the company starting from 2016.
   The plan for raising cash involves offering ship owners promissory notes ahead of a planned September 2016 public offering in exchange for the ship owners lowering charter rates in the short term. Those lower charter rates would free up about $150 million over the next few years.
   Israel Corp. has estimated that Zim will face a cash flow shortage of $1 billion through 2013 and it attempts to navigate a historically difficult market for ocean carriers. The company's shareholders have pledged $350 million in loans to support the carrier, which is wholly owned by Israel Corp., Israel's largest holding company. An initial $50 million loan was approved just a few weeks ago and another $100 million is expected before the end of 2009.
   Without all the elements of the restructuring occurring, Israel Corp. said Zim would face a difficult time existing as a 'going concern.'
   Meanwhile, Standard & Poor's on Tuesday lowered Zim's bond rating on three series of bonds, worth $345 million, issued in 2005-06 from B to CC.
   The Zim statement is available here.