Zim Integrated Shipping Services Ltd. employees today sent a letter to the company's bondholders representatives to persuade them to vote in favor of postponing the deposit of a $25 million guarantee. The vote is scheduled for Thursday.
"We, the 1,000 Israeli employees of Zim, ask you not to sink Zim," state the employees in the letter signed by Zim workers committee chairman Avi Sheetrit. Zim's bondholders representative are Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), and Amitim nationalized pension funds.
Israel Corporation (TASE: ILCO) subsidiary Zim owes $3 billion, and is seeking a new debt settlement with it creditor banks and bondholders. If the bondholders reject the company's request, they could demand immediate repayment of the $376 million bond debt, or even force Zim's liquidation.
"As representatives of savers who seek to be loyal to them, we call you not to throw out the baby with the bathwater and throw us into the ranks of the unemployed. If you agree to postpone receipt of the guarantees, you will see us as loyal partners for the recovery of the company," said the employees. The letter implies that rejecting the request could be a two-edged sword for the bondholders. "It is important to note that the pension funds and compensation money of the company's employees are managed by you. If you vote against Zim's proposal… we will consider this a strike against the employees' trust, after they placed all their savings with you."
Sheetrit adds that the banks, Zim's main creditors, have agreed to postpone the company's debt payments, in part after reaching agreement with Zim's management on employees' conditions and streamlining measures which will save NIS 50 million.
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2013
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