The company will inject $200 million into its shipping subsidiary, but the arrangement has a deadline.
Israel Corporation (TASE: ILCO), controlled by Idan Ofer, notified the Tel Aviv Stock Exchange today that it had approved the memorandum of understanding for a debt settlement that its subsidiary Zim Integrated Shipping Services Ltd. reached with most of its creditors. The arrangement is however subject to a deadline: the understandings will be void if it is not completed by July 1.
The Israel Corporation board accordingly approved an injection of $200 million into Zim, along with a dilution of its stake in the shipping company to 32%. Israel Corporation will also forgive $238 million of debt owed to it by Zim, and will make available a credit line of $50 million for two years and additional guarantees amounting to $10 million.
Zim is currently conducting talks with its creditors and with the State of Israel in a bid to complete the debt arrangement.
Published by Globes [online], Israel business news - www.globes-online.com - on May 15, 2014
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