"The Ofer family has dug its hand deep, deep into its pockets. I'll cite a figure: NIS 1.6 billion," Israel Corporation (TASE: ILCO) VP communications and regulations Eli Goldschmidt told “IDF Radio" (Galei Zahal) today. He was referring to the debt settlement that Israel Corp. is trying to arrange for its wholly-owned subsidiary, Zim Integrated Shipping Services Ltd.
Last Thursday, the Zim's bondholders sent a letter to the company's management, rejecting the Israel Corp.'s ultimatum today to agree to its proposed debt settlement.
Goldschmidt said, "The law does not require them to do this. The bondholders are owed $350 million, and there additional creditors. The figure of NIS 1.6 billion, in addition to the recovery plan, which includes the bondholders and creditors, such as Far Eastern shipyards and the banking syndicates, with whom settlements have been reached. Some of them have brought their own money to the settlement in the clear belief that Zim should continue to operate.
"There are many indications that the shipping market will recover by late 2010 or in 2011. There's a strong probability that Zim will return to recovery. Such a complex settlement requires all the parties to want it. The last hurdle to obtaining this settlement is the settlement with the bondholders. I want to say that the bondholders' representatives have achieved achievements and done amazing work for their bondholders."
“IDF Radio": Isn't postponing the debt until 2016 a bit much?
Goldschmidt: "No long-term financial and savings system is built on repayment of the entire amount in one day. Every system built on long-term savings with a turnover of several years. I don’t want to sound frivolous, but we're talking as if there is some kind of compulsion to repay. However, it should be remembered that not one shekel of the debt is being touched, and there will payment of the interest and compensation on the four-year postponement. If the projections for recovery are realized, the bondholders won't be hurt."
Israel Corp.'s share fell 2.4% by midday to NIS 2,463.
Published by Globes [online], Israel business news - www.globes-online.com - on October 11, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009