Israel Won't Give Up "Golden Share" in Zim
Finance Minister Yair Lapid has decided not to forego the government's "golden share" in debt-ridden Zim, Israel's biggest shipping company, the ministry said on Thursday.
The golden share guarantees that the state's interests are preserved, the ministry said. The government must approve any decisions that could affect the "Israeli identity" of the company and the golden share prevents "hostile entities" from taking positions that could influence Zim, it said.
It also ensures that Zim - originally a government company that was sold to conglomerate Israel Corp - will continue to operate ships in and out of Israel during times of emergency.
Like many others in the shipping industry, Zim has been hit hard by the faltering global economy in recent years and has also born the cost of upgrading its fleet to more efficient vessels. Zim, whose problems helped send Israel Corp to a net loss of $62 million in the first quarter, has proposed a $3 billion restructuring plan.
Under the 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, while Israel Corp agreed to invest an additional $200 million, provide a liquidity line of $50 million and forgo $225 in loans.
While Zim had reached an agreement with the Israeli Defense Ministry regarding its golden share, approval from other government ministries was still needed.
Zim's spokesman had no immediate comment on the Finance Ministry's decision.
Copyright Reuters 2014.