Troubled Israeli container carrier Zim Integrated Shipping Services is actively considering consolidation as a possible way out of its continuing financial difficulties, IFW reports.
CEO Rafi Danieli told IFW’s sister publication Lloyd’s List, that the company would undergo its second restructuring in just two years.
His frank admission came in a conference call to local analysts, after Zim unveiled a US$66 million loss in the third quarter.
He also gave details of a $100 million cash injection from Ofer Group, a family concern that ultimately controls over 99% of Zim’s shares.
A merger is one option, sources have confirmed, although they stressed that no potential partners had yet been approached.
At the centre of Danieli’s thinking is the realisation that the big three players in the sector – Maersk Line, MSC and CMA CGM – are pulling away from the pack, in terms of size, enabling them to make best use of the latest generation of very large boxships, with their far lower cost per slot.
He is also said to be mindful of Koichi Muto, president of MOL, who has said that the Japanese number one had studied the possibility of merging with NYK and K-Line to build a super flag-carrying line.
As a result, Danieli is ready to consider any possibilities. No preconditions have been set, with even the question of majority control said to be negotiable.
Zim’s result for the July-September period compares with a profit of $37 million in the corresponding months of 2010. Revenue was down 8%, declining to $973 million from $1.1 billion.
In addition to announcing the $100 million lifeline from Ofer Group, Zim said it had asked its financing banks to waive or amend existing financial covenants for the next 12 months, and had reached agreement with “most relevant parties”. It emphasised that all covenants were met in the third quarter. In addition, cashflow from operating activities was positive and throughput volumes up.
Zim attributes its current woes to a 12% drop in the rate per box it achieved, which dropped from $1,496 to $1,310 per container. That fall more than offset an increase in volumes to 646,000teu from 596,000teu previously. Higher bunker prices also did their damage.
Danieli said: “In light of the difficult market conditions and uncertainty in the sector, the company expects its results in the next few quarters to be lower than previously estimated. Accordingly, it will prepare a new long-term business plan.”
CEO Rafi Danieli told IFW’s sister publication Lloyd’s List, that the company would undergo its second restructuring in just two years.
His frank admission came in a conference call to local analysts, after Zim unveiled a US$66 million loss in the third quarter.
He also gave details of a $100 million cash injection from Ofer Group, a family concern that ultimately controls over 99% of Zim’s shares.
A merger is one option, sources have confirmed, although they stressed that no potential partners had yet been approached.
At the centre of Danieli’s thinking is the realisation that the big three players in the sector – Maersk Line, MSC and CMA CGM – are pulling away from the pack, in terms of size, enabling them to make best use of the latest generation of very large boxships, with their far lower cost per slot.
He is also said to be mindful of Koichi Muto, president of MOL, who has said that the Japanese number one had studied the possibility of merging with NYK and K-Line to build a super flag-carrying line.
As a result, Danieli is ready to consider any possibilities. No preconditions have been set, with even the question of majority control said to be negotiable.
Zim’s result for the July-September period compares with a profit of $37 million in the corresponding months of 2010. Revenue was down 8%, declining to $973 million from $1.1 billion.
In addition to announcing the $100 million lifeline from Ofer Group, Zim said it had asked its financing banks to waive or amend existing financial covenants for the next 12 months, and had reached agreement with “most relevant parties”. It emphasised that all covenants were met in the third quarter. In addition, cashflow from operating activities was positive and throughput volumes up.
Zim attributes its current woes to a 12% drop in the rate per box it achieved, which dropped from $1,496 to $1,310 per container. That fall more than offset an increase in volumes to 646,000teu from 596,000teu previously. Higher bunker prices also did their damage.
Danieli said: “In light of the difficult market conditions and uncertainty in the sector, the company expects its results in the next few quarters to be lower than previously estimated. Accordingly, it will prepare a new long-term business plan.”