Zim to List Shares on Wall Street in First Half of 2016

Banks confirm plans but say no terms have been set in IPO of Israeli shipping company

Yoram Gabison
Reuters
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A Zim London cargo ship, in 2014.Credit: Bloomberg
Yoram Gabison
Reuters

Bank of America Merrill Lynch and Barclays Plc will lead an initial public offering of Israeli shipping firm Zim Integrated Shipping Services on Wall Street sometime in the first half of next year, two sources familiar with the matter told Reuters on Thursday.

One source said no date or valuation has been set but the offering will be in New York, likely on the New York Stock Exchange. Barclays and Bank of America Merrill Lynch officials declined to comment.

Zim, the world’s 17th-largest shipping line, is a unit of Kenon Holdings, controlled by billionaire Idan Ofer. A Kenon spokeswoman declined to comment.

Its shares, in which 29% are floated, closed up 3.6% at 54.55 shekels ($14.14) in Tel Aviv.

Zim said in an emailed response that it “has been contemplating going public and other financing options since 2007. This strategy has not changed. We have nothing to report at this time and do not comment on rumors.”

Like many others in the shipping industry, Zim had been hit hard by sluggish trade in recent years and has also borne the cost of upgrading its fleet to more efficient vessels.

It marks the second time that the company is taking a stab at going public. In 2008, Zim had planned to raise more than $500 million in a Hong Kong IPO before falling behind on bond payments due to overcapacity in the global shipping industry.

Last year, Zim restructured $3.4 billion of its debt in which creditors swapped $1.4 billion in debt they hold for a 68% equity stake in the company and committed to take the company public. As part of the restructuring, Zim was committed to registering its shares for trading.

The restructuring was the second in four years for the company and prevented it from failing under the weight of heavy financial costs to bondholders and banks as well as the steep fees it was paying for vessels it leased from private companies controlled by Idan and Eyal Ofer and Udi Angel.

The IPO has been made possible by a big improvement in Zim’s finances over the past year, including a drop in its net financial debt to about $2 billion, the closing of losing routes like Asia-Northern Europe and the big decline in fuel prices.

In the first half, Zim posted an adjusted net profit of $21 million on turnover of $1.56 billion, turning around from a net loss of $132 million on turnover of $1.7 billion a year earlier. Shareholders’ equity, however, is just $94 million.

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