(Bloomberg) — Zim Integrated Shipping Services Ltd. said the Israeli government’s reluctance to allow the container line to be split is frustrating its ability to raise financing and enter alliances amid a slump in carriage rates.
Creating an international unit and a smaller Israel-focused entity would free the bulk of the business from the constraints of a golden share that gives the state veto power over changes to Zim’s charter, Chief executive Officer Rafi Danieli said.
“It will make it easier to go to the financial markets, enter alliances and allow us more flexibility to develop the company,” Danieli said in a phone interview, adding that talks with the government are continuing over the creation of an overseas arm that would account for 85 percent of operations.
A drop in shipping rates prompted by an economic slump and capacity glut might depress trading into 2013 prior to a rebound in the second half, Danieli said. Zim, controlled by billionaire Idan Ofer’s Israel Corp., posted third-quarter net income of $16 million versus a $66 million year-earlier loss as it cut costs and revenue rose during the peak for pre-Christmas restocking.
Danieli said he’s comfortable with Haifa-based Zim’s orders for new vessels, equal to 47 percent of the existing fleet, a level exceeded only by Taiwan’s Evergreen Line among the global top 25 according to shipping data provider Alphaliner.
The new capacity will enter the market from 2015, the year that the volume of goods able to pass through the Panama Canal between the Atlantic and Pacific is due to jump with the opening of a new channel. “We have to be ready for this,” he said.
– Tom Metcalf, Copyright 2012 Bloomberg.