Saturday, September 26, 2009

Zim Line Delays Taking New Container Ships

Korean Order Postponed for up to Five Years
Shipping News Feature

KOREA – Zim Integrated Shipping Services Ltd., the Israeli carrier, has now delayed receipt of a total of thirteen new container ships with the latest agreement with suppliers Hyundai to postpone receipt of four 10,000 TEU vessels due for delivery next year.

The troubled shipping line had already reached similar agreements with Samsung in Korea and CSBC in Taiwan whilst simultaneously cutting the charter fees paid to vessel owners by around 35% for the next three years. Zim currently charters almost 60 vessels with a combined capacity of circa 145,000 TEU’s.

Zim are controlled by the Israel Corporation (TASE:ILCO) and bondholder tempers have flared recently at the proposed bail out plan for Zim who are predicted to have a cash flow deficit of around $1 billion between now and 2013. Ofer Shipping Holdings have agreed to discount $ 150 million in leasing fees due from Zim over the next four years and bondholders in TASE:ILCO are being asked to approve a transfer of $ 250 million in funds to Zim following last months transfer of $100 million.

Zim made a 2009 first half loss of $350 million, but said it expects to achieve an operating profit of around $100 million in 2011, growing to approximately $350 million in 2012 and some $500 million in 2013. Commenting on the delayed orders Zim CEO Rafi Danieli said “Industry experts predict that by 2014-2015 we’ll be past the current crisis and the market will have recovered. We look forward to strong market conditions that will enable Zim to grow, prosper and benefit from the new, efficient fleet at the right time.”

To add to the confusion the legendary Sami Ofer, godfather of Israeli shipping has apparently recently acquired, via one of his own private companies, thirteen second hand vessels, including ten container ships, at a knock down price from a Norwegian banking group who had seized them from a US creditor.