(Adds details on creditors and debt, quotes)
JERUSALEM Oct 5 Israeli shipping company Zim,
which has been hit hard by the weak global shipping market, said
on Wednesday it had agreed to defer $115 million of upcoming
payments to creditors until 2018.
Zim said in its second-quarter report that the agreement
with its creditors was to defer payments due over a 12-month
period, which began on Sept. 30, until the start of 2018. The
creditors include banks and ship owners, but Zim declined to
Deferrals with one group are still subject to final due
diligence, documentation and approvals.
"With this agreement in place the company maintains its
financial stability and will continue to develop its growth
plan," Zim said in a statement. This plan is to focus on certain
markets where it has a competitive advantage, it said.
The shipping industry has suffered from a prolonged global
economic crisis, Zim said, characterised by slower growth of
demand and worsening overcapacity.
"The very challenging market situation impacts the industry
as a whole," Zim Chief Executive Rafi Danieli said in a
Zim reported a second-quarter loss of $74.2 million, versus
a profit of $12.1 million a year earlier. Income from voyages
dropped to $612 million from $763 million. Zim's net debt was
$1.1 billion. Its total liabilities were $1.8 billion, which
includes current liabilities with suppliers.
Shippers have been looking to protect their market share and
have allowed freight rates to fall sharply, Zim said.
"Freight rates may remain at depressed levels for some time,
which could adversely affect the company's revenue and
profitability," it said. "Current economic conditions make
forecasting difficult, and there is possibility that actual
performance may be materially different from management plans
The shipping industry as a whole has struggled to cope with
the weak market conditions. Hanjin Shipping Co of
South Korea, for example, sought court receivership in August.
Zim is 32 percent held by Kenon Holdings, with the
remainder held by financial institutions and ship owners.
(Reporting by Ari Rabinovitch and Tova Cohen. Editing by Jane