The Knesset Finance Committee will shortly be holding a discussion on the state of Zim Integrated Shipping Services and the arrangement being formed by the shipper's parent company Israel Corporation, at the urging of Knesset members Shelly Yachimovich (Labor) and Carmel Shama (Likud).
"The story of the debt arrangement at Zim contains all the ingredients and smells of shakshuka," said Shama, referring to the documentary by Miki Rosenthal, "The Shakshuka System," on the unholy relations between tycoons - mainly the Ofer family, which owns Israel Corporation and Zim - and government. (Shakshuka is an egg and tomato dish.)
"As elected representatives of the public, we must make sure that nobody means to cook [a shakshuka,] and make the public swallow the cost of the arrangement and its risks," Shama continued.
Yachimovich is of the opinion that the arrangement Israel Corporation is proposing, to reschedule Zim's debts, is not good enough. The public isn't getting enough compensation in exchange for waiting long years before receiving its money, she says. "The Ofer family must understand that the responsibility for Zim's losses lies with it."
The Ofers have agreed to forgo $160 million of the $450 million that Zim owes to their private companies. Yachimovich is not impressed: She suggests that the Ofers provide money to Zim by selling unrelated assets, such as their malls or media holdings, to save the shipper.
Wait until 2020
Knesset member Nachman Shai (Kadima), a member of the Economic Affairs Committee, is also demanding an urgent debate on Zim, to protect the public from the "bad smell" arising from the arrangement, he says. He demands that the suggested debt rescheduling be presented to the Economic Affairs Committee. (See the cartoon on page 5.)
Late Sunday night, Israel Corporation, which is controlled by Idan and Sami Ofer, announced the outlines of the deal taking shape regarding Zim. The gist is that repayment of $300 million to Zim bondholders would wait until 2020.
In exchange for their forbearance, the bondholders will get sweeter interest on the bonds and the right to convert debt into shares. Also, the banks will lend Zim half a billion dollars to keep it afloat. Since most of Israel's pension funds and provident funds are invested in Zim bonds, the delay in repayment means that they'll be less liquid.
Nir Gilad, chief executive of Israel Corporation, stated that the Ofer family means to repay every shekel to the public: All it's asking for is more time, until 2020.
Yet the parliamentarians seem unconvinced. Ilan Ghilon, chairman of the Meretz faction in Knesset, decried the agreement in no uncertain terms: "It's an act like thieves in the night. The Ofer Brothers and Zim are not above the law. Some of the bondholders won't be alive in 2020. Immediate intervention by the regulator needs to be taken to stop it."
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