Zim Integrated Shipping Services Ltd. has signed a non-binding letter of intent to sell its stake in a foreign subsidiary to a third party. Zim did not disclose the name of the foreign subsidiary, nor the name of the buyer. Zim said that the buyer is a company with operations related to shipping, but which did not own any ships. Zim also did not disclose the size of the stake.
Zim estimates the proceeds from the sale at $130-170 million, depending on the final agreement and price adjustment mechanisms set out in the letter of intent.
Today's announcement follows an announcement on May 5 that Zim was in advanced negotiations on two separate deals for the sales of foreign subsidiaries to third parties for $150-190 million.
The sale of the foreign subsidiaries may be part of Zim's plan to meet its cash flow guidance for the coming years, which it announced as part of the debt settlement that was approved in late 2009. In that settlement, Zim's creditors rescheduled more than $1 billion in debt, and its parent company, Israel Corporation (TASE: ILCO), injected more than $500 million into the company.
Israel Corp's share price fell 0.3% in early trading on the TASE today to NIS 2,418.
Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2010
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