The company has laid up 16 ships whose capacity amounts to 20.5% of the total transportation capacity of Zim. holding urgent discussions with banks over $1.4bn of related credit lines
Israel Corp., which owns 99 percent of Zim Integrated Shipping Services Ltd., said in a statement to the Tel-Aviv Stock Exchange last Thursday that various measures were being taken to adjust to deteriorating market conditions, including discussions with shipyards about ships now on order. The company said negative developments in the international shipping market "have increased in their intensity during the present period," pointing to the "high supply of ships in relation to a moderate demand, which leads to an increasing fall in the use of ships and in transportation fees."
The continuation of the difficult conditions in international shipping markets continues to influence Zim in a negative manner," it said, hurting "business results, its compliance with financial covenants and its ability to raise capital as well as the terms of its financing."
The company said it was seeking "to reschedule part of payments in relation to the purchase of ships by providing credit to Zim for certain sums."
Zim’s parent company said it was in talks with South Korean shipyards to cancel newbuilding orders or delay deliveries, and is holding urgent discussions with banks over $1.4bn of related credit lines.
Israel Corp. also said in the letter to the stock exchange that it has laid up 16 ships whose capacity amounts to 20.5 percent of the total transportation capacity of Zim, but said, "This figure is expected to increase during the course of 2009" so long as the financial crisis lasts.
The statement from Ofer Group-controlled Israel Corp to the Tel-Aviv Stock Exchange said that Zim would also be returning chartered tonnage to owners at the end of hire period, laying up vessels, reorganising services, and conducting a feasibility into theexit from investments in areas associated with liner shipping. Jobs would also be axed.