Zim Rio Grande, image courtesy Huhu Uet, published under Creative Commons License
TEL AVIV, July 1 (Reuters) – The chief executive of Zim, Israel’s biggest shipping company, has indicated he wants to step down once its $3 billion restructuring plan has been implemented, a source at parent company Israel Corp said on Tuesday.
Like many others in the shipping industry, Zim has been hit hard by the faltering global economy in recent years and has also borne the cost of making its fleet more efficient.
Hit by Zim’s problems, Israel Corp reported a net loss of $62 million in the first quarter and the company has proposed a $3 billion restructuring plan.
“Zim CEO Rafi Danieli has expressed his desire to step down as CEO and Israel Corp would like him to become chairman of Zim, but we will no longer be deciding alone,” the source, who asked not to be named, told Reuters.
A spokesman for Zim declined to comment.
Under the restructuring deal, Israel Corp’s near 100-percent stake in Zim will fall to 32 percent after a $1.4 billion debt-to-equity conversion agreement with creditors.
Israel Corp shareholders have approved the restructuring of Zim but the fate of the government’s “golden share” is holding up implementation.
Zim – originally a government company that was sold to conglomerate Israel Corp – has asked the state to give up its golden share, but Finance Minister Yair Lapid last month declined to do so.
The golden share ensures that Zim will continue to operate ships in and out of Israel during times of emergency and also gives the government the power to approve any decisions that could affect the “Israeli identity” of the company, the ministry said in June.
It is now up to a district court judge in Haifa to decide on the matter after the government and Israel Corp could not reach a compromise. (Reporting by Tova Cohen; Editing by Susan Fenton)
© 2014 Thomson Reuters. All rights reserved.
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