Israel Corp. (TASE: ILCO), controlled by the Ofer family, announced today that the board of Zim Integrated Shipping Services Ltd. had approved the purchase of eight container ships from the Hyundai shipyards in Korea. The deal is worth $1 billion. Zim will take delivery of the ships during the second half of 2009.
Israel Corp added that the deal would be financed by the company’s existing capital, following the bond issue of last year. It will also consider the option of selling the ships and leasing them back.
Zim and Israel Chemicals (TASE: CHIM) are Israel Corp’s two largest holdings, after the sale to the state of Oil Refineries Ltd.. Israel Corp’s profit in the first quarter of 2006 plunged 50%, largely as the result of the erosion in Zim’s profits.
Zim has been badly hit by the annualized 60% increase in energy prices, which cut its quarterly operating profit by 37% to $31 million, in line with the erosion in its gross profit margin. The company had a shareholders’ equity of $526 million at the end of quarter, financing a balance sheet of $1.7 billion.
Published by Globes [online], Israel business news - www.globes.co.il - on June 7, 2006
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