Zim Integrated Shipping Services Ltd. is firing up to 100 employees and cutting executive salaries by 10%, as part of its streamlining plan. The employees will take early retirement with increased severance compensation, while the executive pay cuts are reportedly consensual.
Zim Integrated Shipping Services Ltd., owned by Israel Corporation (TASE: ILCO), is in the throes of a severe financial crisis, just two years after reaching a debt settlement. The company lost $245 million in January-September 2011, five times its loss of $42 million in the corresponding period of 2010. The third quarter loss nearly doubled to $66 million from $37 million for the corresponding quarter. Due to the losses, in November, Israel Corp injected $50 million into the company and its parent company Ofer Holdings Group injected an additional $50 million.
On Sunday, Israel Corp. announced that Zim had failed obtain the concessions or amendments to the financial covenants with its creditor banks, missing a December 31, 2011, deadline. The company owes $2 billion, mostly to foreign banks.
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2012
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