Israeli gov't appeals court ruling on Zim in feud over debt deal

Posted by Joseph Keefe
Monday, July 07, 2014

Israel's Finance Ministry said on Monday it appealed a court ruling that chipped away at its golden share in the country's biggest shipping company Zim, a move that could further delay a $3 billion debt restructuring plan.

An Israeli court ruled last week the government could keep its golden share, which gives it veto power over some major decisions, while raising the amount of stock shareholders are allowed to sell without government approval.

Conglomerate Israel Corp, which has just under 100 percent of the equity in Zim, had said the court's decision would allow it to carry out the proposed restructuring on July 15.

But the Finance Ministry said it had appealed the ruling with the country's Supreme Court, asking for an order to postpone the restructuring. A ministry spokesman said it was unclear when the Supreme Court would discuss the case.

The ruling last week had called for Zim, which like other shipping companies has been hit hard by a faltering global economy in recent years, to seek authorisation for shareholders to sell 35 percent or more of its stock, rather than a previous 24 percent.

But it said the company must notify the government before shareholders could sell between 24 and 35 percent of the shares and give the state 21 days to state any objections.

Israel Corp said that under the restructuring its stake in Zim will fall to 32 percent after a $1.4 billion debt-to-equity conversion agreement with creditors.

Reporting by Ari Rabinovitch

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