Zim Shipping Downgraded by S&P to CCC

Zim Rio Grande, image courtesy Huhu Uet, published under Creative Commons License

JERUSALEM, Dec 15 (Reuters) – Standard & Poor’s Maalot lowered its rating for Israeli shipping firm Zim to “CC” from “CCC”, citing a going concern warning in third-quarter results and a likelihood of debt restructuring in the near term.

The Israeli unit of S&P maintained a “negative” outlook for Zim, a subsidiary of the Israel Corp conglomerate.

Zim, which has been hurt by tough economic conditions and has debt of around $3 billion, lost $44 million in the third quarter, versus a $16 million profit a year earlier.

Zim is the world’s 17th largest shipping company with a 2 percent market share.

“The continuing crisis in the shipping industry continues to adversely affect Zim’s operating results,” the ratings agency wrote in a report on Sunday.

“In our opinion, without restructuring the company’s debts and/or without a significant upturn of industry conditions, the company will find it difficult to meet (debt) obligations in 2014.”

S&P Maalot had cut Zim’s rating to “CCC” from “B” in May. (Reporting by Steven Scheer)