Israel Corp. (TASE: ILCO) will convene a special shareholders' meeting on October 14th to discuss its plan to support its troubled shipping unit, Zim Integrated Shipping Services Ltd..
An Israel Corp notice to the Tel Aviv Stock Exchange (TASE) last night said that, "The company's investment in Zim, including the balance of an injection of $250 million, taking into account Zim's situation, was and is beneficial and necessary for the continued operation of Zim as a "going concern".
According to the notice, Israel Corp expects the current problematic situation in the shipping industry will continue through 2009 and 2010, and only in 2011 will a gradual improvement begin.
As part of the recovery plan, Zim is asking creditors for concessions in their relative rights. That is, the company is not sure it can pay its debts on time. The company said that the concessions from financial creditors do not include debt cancellations, and are primarily postponements of principal payments, and extending the debts over a longer period of time, with a higher interest rate.
Zim expects that between 2009 and 2013, it will face a cash flow deficit of about $1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2009
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