The Israel Corporation is planning a 2-billion-pound listing on the London Stock Exchange as part of its plan to split its vast array of holdings into two groups, The Sunday Times reported.
The British paper said the listing would include Zim Integrated Shipping Services, chipmaker TowerJazz, IC Power and Israeli-Chinese carmaker Qoros. The news came as Zim bondholders rejected a proposal by Israel Corporation to delay providing collateral against $25 million in loans until the end of next year.
Under the plan, the Israeli holding company would keep two of its most lucrative companies – Israel Chemicals and Oil Refineries Ltd. – and remain listed on the Tel Aviv Stock Exchange. Israel Corporation shares closed 0.9% higher on Sunday, far off their peak for the day.
An Israel Corporation spokesman declined to comment on the report, Reuters news agency said.
Controlled by Idan Ofer, the holding company announced last month it would split off some of its less-profitable assets into a new, listed company in a bid to boost the value of its core businesses and attract a wider range of investors. It said the process of separating the company into two would be completed within 12 months.
The bondholders' vote on Sunday threw the future of Zim into doubt, but Zim vowed to continue talks with the bondholders.
"In recent weeks we have explained to bondholders the importance of delaying the collateral in the name of devising a business plan to strengthen the company as it faces the global economic crisis," the company said in a statement. It said the creditors – shipowners, banks and the shippers themselves – "believe in the company and its future, and therefore agreed to give up collateral and cash payments."
Zim said the bondholders were the sole holdouts, and in doing so were showing "irresponsibility toward the company, other creditors and the public's money."
Under an agreement at the end of 2009 between Zim and bondholders owed $391 million, Zim was obligated to provide the $25 million in collateral by July 13. But two weeks ago Zim said other creditors, including bank lenders, objected to the bondholders getting collateral while they had agreed to a delay in receiving some $166 million in principal payments and other concessions.
Before the reorganization, Israel Corporation will work toward resolving Zim's $2.7 billion debt load through a restructuring with banks, shipyards and bondholders, The Sunday Times said.