(Adds details on creditors and debt, quotes)
JERUSALEM, Oct 5 (Reuters) - 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 name them.
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 statement.
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 and expectations.”
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 Merriman)