Israel Corp's Zim slashes debt in restructuring deal

The proposed deal will see Israel Corp reduce its majority control of Zim from 99.7% to 32% in an undertaking to invest $200m into Zim and write-off a debt of approximately $225m owned by Zim since 2009, Israel Corp said in a statement on Thursday.

Israel Corp will also provide a credit line to Zim in an amount of $50m for two years from the date of completion of the debt restructuring deal.

Zim's creditors will then control the remaining and majority of 68% stake as part of the debt settlement plan.

The deal will also allow Zim to significantly write-off a chunk of its total debts of $3bn. The balance of the debt is estimated to be $1.82bn, where $907m will be converted to secured debt for which Zim will sign new loan agreements with the creditors, comprising of bondholders, shipyards and banks.

The major debt restructuring process has paved the way for Zim to relook its initial public offering (IPO) plan, as Israel Corp affirmed that “Zim shall act to procure the listing of the shares for trading, immediately after completion of the (debt restructuring) arrangement”.