Thursday, November 26, 2009

Zim drags down parent company

From Israeli paper Globes(online)

Zim troubles drag Israel Corp. down to loss

Zim's revenue sank nearly 50% to $596 million.

Hillel Koren26 Nov 09 10:07

Israel's largest holding company, Israel Corp. (TASE: ILCO) reported a third quarter net loss of $11 million, compared with profit of $253 million in the corresponding quarter of 2008. The company released its third quarter financial results this morning.

The company's troubled shipping unit, Zim Integrated Shipping Services Ltd., reported a loss attributable to Israel Corp. shareholders of $208 million, compared with a loss of $61 million in the corresponding quarter. Expectations were for Zim's loss to reach $120 million.

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And from The Journal of Commerce

Zim’s loss helped push parent Israel Corp. into an $11 million third quarter net loss from a year-earlier profit of $253 million.

Israel Corp. shareholders narrowly voted earlier this month for a $450 million capital injection for Zim as well as a $100 million “safety net” as part of a recovery plan for the world’s 17th-largest carrier.

The troubled carrier, which faces a cash flow deficit of $1 billion over the next four years, also will receive more than $500 million in new financing from its banks in 2009-10 to finance the purchase of ships repayable over more than 10 years.

Zim has cut charter payments to ship owners, returned leased ships, trimmed its work force, closed unprofitable services, joined forces with rivals on some routes, and delayed deliveries of new ships as part of the recovery program.

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