One day before the Israel Corporation's deadline for completing a debt arrangement for its Zim Integrated Shipping Services Ltd. subsidiary, no compromise has been achieved between the company and the state on the status of the latter's golden share. The Israel Corporation (TASE: ILCO), controlled by Idan Ofer, regards this issue as an essential condition for any debt arrangement.

As of web posting, the state was persisting in its refusal to alter the terms of the golden share, and Haifa District Court Judge Adi Zarankin is therefore expected to publish his ruling on the question today or tomorrow. In accordance with the judge's instruction yesterday, the two parties, the Israel Corporation and Zim on the one hand and the state on the other, were due to respond by 4:00 pm today to the compromise proposed to them. Under this compromise, the restriction on the transfer of Zim shares, i.e. the state's veto on the sale of a block of shares in the shipping company, would apply only to a bloc of 40% of the shares after the arrangement, instead of 24% at present. This would enable the Israel Corporation to sell its stake in Zim (32% after the completion of the debt arrangement) without the state's consent. The debt arrangement, which would eliminate about half of the shipping company's NIS 3 billion debt, was approved by a 66% majority of the minority shareholders in the Israel Corporation. If the arrangement is implemented, the Israel Corporation will inject $200 million into the failing shipping company, with the addition of $50 million in guarantees, in return for foregoing NIS 238 million in debt.

Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2014

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