Zim Line Debt Restructuring Plan to Proceed
Israel's Finance Ministry and Israel Corp have reached a compromise regarding the government's "golden share" in the country's biggest shipping company Zim, paving the way for a $3 billion debt restructuring plan to move ahead.
The government last week appealed an Israeli court ruling regarding the golden share but the two sides said on Tuesday they have reached a compromise that is similar to the original court ruling.
As a result, Israel Corp said in a statement, it has asked the district court to approve the restructuring arrangement it has reached with its shareholders. If the court approves, Israel Corp said it plans to carry out its part of the deal by the end of Tuesday.
Conglomerate Israel Corp owns just under 100 percent of Zim, which like other shipping companies has been hit hard by a faltering global economy in recent years. Under the restructuring its stake in Zim will fall to 32 percent after a $1.4 billion debt-to-equity conversion agreement with creditors.
The compromise will allow the government to keep its golden share, which gives it veto power over some major decisions and requires Zim to operate ships during times of emergency.
At the same time, the compromise requires government authorisation for the sale of 35 percent or more of Zim, up from a current level of 24 percent.
The sale of anywhere between 24 and 35 percent will require the seller to give the government advance notice with all details of the planned sale. If the government believes the sale will harm the country's security it has 30 days to state any objections, in which case the seller can go to court.
The court ruling had given the state 21 days to object.
(By Tova Cohen)