Israel Corp. said it is prepared to inject $150 million into Zim Integrated Shipping Services if needed after the container carrier swung to a third-quarter loss and readied a restructuring program to respond to falling ocean freight rates and slowing cargo volumes.
"The company's willingness in principle [to provide funds] is in light of the conditions in the shipping industry and international credit markets and their impact on Zim," Israel Corp. said in an earnings statement.
Israel's biggest holding company warned that if the shipping and financial markets worsened "it could have an adverse impact on Zim's business results, compliance with its financial covenants, credit rating, ability to raise funds and credit terms."
Zim is negotiating with its banks to change or waive certain financial covenants for an agreed period of time, Israel Corp. said.
The carrier posted a loss of $61 million in the three months to Sept. 30 from an $18 million profit a year earlier as revenue grew 13 percent to $1.2 billion. Traffic rose to 659,000 TEUs from 611,000 TEUs but this was accompanied by "sharp" declines in freight rates, particularly on the routes between Asia and northern Europe.
In the first nine months of the year Zim lost $131 million against a year-earlier profit of $32 million as revenues rose to $3.4 billion from $2.75 billion. Traffic gained 10.7 percent to 1.94 million TEUs but average rates per container fell 9.9 percent.
Israel Corp. said Zim's strategic plan envisaging "large" increases in shipping capacity and cargo volumes in 2009-12 "cannot be implemented under current market conditions". Instead, the company will contract operations and save costs including staff, ports and containers, implement route changes, return leased ships to their owners and enter into partnerships with other carriers.
Zim is the 17th largest ocean carrier with a fleet capacity of 274,690 TEUs and a 2.1 percent world market share, according to AXS-Alphaliner, a Paris-based consultant.
"The company's willingness in principle [to provide funds] is in light of the conditions in the shipping industry and international credit markets and their impact on Zim," Israel Corp. said in an earnings statement.
Israel's biggest holding company warned that if the shipping and financial markets worsened "it could have an adverse impact on Zim's business results, compliance with its financial covenants, credit rating, ability to raise funds and credit terms."
Zim is negotiating with its banks to change or waive certain financial covenants for an agreed period of time, Israel Corp. said.
The carrier posted a loss of $61 million in the three months to Sept. 30 from an $18 million profit a year earlier as revenue grew 13 percent to $1.2 billion. Traffic rose to 659,000 TEUs from 611,000 TEUs but this was accompanied by "sharp" declines in freight rates, particularly on the routes between Asia and northern Europe.
In the first nine months of the year Zim lost $131 million against a year-earlier profit of $32 million as revenues rose to $3.4 billion from $2.75 billion. Traffic gained 10.7 percent to 1.94 million TEUs but average rates per container fell 9.9 percent.
Israel Corp. said Zim's strategic plan envisaging "large" increases in shipping capacity and cargo volumes in 2009-12 "cannot be implemented under current market conditions". Instead, the company will contract operations and save costs including staff, ports and containers, implement route changes, return leased ships to their owners and enter into partnerships with other carriers.
Zim is the 17th largest ocean carrier with a fleet capacity of 274,690 TEUs and a 2.1 percent world market share, according to AXS-Alphaliner, a Paris-based consultant.