Korean shipyards refuse to cancel or postpone Zim orders
Lloyd's List reported that the timing of the Zim shipping company's orders of new volume may be unfortunate. That is, evidently, too bad. It added that "South Korean shipyards are refusing to bow to pressure from big shipping companies to cancel or reduce prices and are only very reluctantly agreeing to postpone some deliveries."
That report was based on a South Korean source, following weeks of hectic negotiations between the shipyards apparently Hyundai and Samsung and shipping company owners. Early last week the Israel Corporation reported changes in the strategic plans of its subsidiary, Zim Integrated Shipping Services, due to the company's financial situation. Those changes have resulted in negotiations with the shipyards for the cancellation or delayed delivery of new ships, and the rescheduling of payments.
Zim's plans for its fleet over the next 4 years include 23 new ships worth a total of USD 3.2 billion. Nine of these ships are due for delivery in 2009, at a combined cost of USD 1.16 billion, with half the cost of each ship due when it is delivered.
Zim officials have announced negotiations with banks for loans totaling USD 1.35 billion to cover the cost of the new ships, prompting Israel credit security rating company Maalot S&P to lower the rating on Zim's bonds one level, to -AA.
Maalot analysts also predicted that the Israel Corporation will have to provide its subsidiary with additional support in 2009, beyond the USD 150 million mentioned in August 2008, when Israel Corporation gave Zim a USD 246 million cash infusion.
Zim's belt tightening measures also include a temporary cutback on its Asia US route, following a decline in demand during the winter months. Instead of daily service from Asia to Tampa, Florida, two ships currently on that route will travel between Kingston, Jamaica and three ports in Florida and Texas.
Zim plans to anchor 10 ships in the Philippine port of Davao. Three of Zim's ships are already laid up in Malalag Bay, near Davao, along with 17 other ships from other companies and there are no more berths there. The ships are expected to spend up to 6 months at anchor, by which time the world trade picture should be clearer.
That report was based on a South Korean source, following weeks of hectic negotiations between the shipyards apparently Hyundai and Samsung and shipping company owners. Early last week the Israel Corporation reported changes in the strategic plans of its subsidiary, Zim Integrated Shipping Services, due to the company's financial situation. Those changes have resulted in negotiations with the shipyards for the cancellation or delayed delivery of new ships, and the rescheduling of payments.
Zim's plans for its fleet over the next 4 years include 23 new ships worth a total of USD 3.2 billion. Nine of these ships are due for delivery in 2009, at a combined cost of USD 1.16 billion, with half the cost of each ship due when it is delivered.
Zim officials have announced negotiations with banks for loans totaling USD 1.35 billion to cover the cost of the new ships, prompting Israel credit security rating company Maalot S&P to lower the rating on Zim's bonds one level, to -AA.
Maalot analysts also predicted that the Israel Corporation will have to provide its subsidiary with additional support in 2009, beyond the USD 150 million mentioned in August 2008, when Israel Corporation gave Zim a USD 246 million cash infusion.
Zim's belt tightening measures also include a temporary cutback on its Asia US route, following a decline in demand during the winter months. Instead of daily service from Asia to Tampa, Florida, two ships currently on that route will travel between Kingston, Jamaica and three ports in Florida and Texas.
Zim plans to anchor 10 ships in the Philippine port of Davao. Three of Zim's ships are already laid up in Malalag Bay, near Davao, along with 17 other ships from other companies and there are no more berths there. The ships are expected to spend up to 6 months at anchor, by which time the world trade picture should be clearer.