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The chief executive of ocean carrier Zim is reported to want to step down once the company’s $3bn debt mountain restructuring plan is complete – but the Israeli government’s refusal to cancel or amend its ‘golden share’ in the troubled company – a “crucial” part of the agreement with its creditors – could mean that is still some way off.

Although a charismatic and positive individual, months of stressful negotiations to find a life raft for the sickly carrier appear to have taken a heavy toll on Rafi Danieli, and he probably feels that he has earned a respite from the daily tribulations of being at the helm of Zim Israel Navigation.

Appeals from Zim to the ministries of defence, transport and treasury to sign-off the ‘golden share’ amendments appear to have fallen on deaf ears, as the government sees its holding as vital to the nation’s security. The arrangement obliges Zim to continue to operate ships in and out of Israel in times of emergency or war.

Under the terms of the proposed restructure, parent Israel Corporation would see its stake in a ‘New Zim’ reduced to 32% from 99.7%, with $1.4bn of debt converted into creditor equity.

Moreover, as part of the agreement, Israel Corp has agreed to waive loans to the carrier of $225m, invest a further $200m and provide a badly needed liquidity line of $50m.

The ‘loosening’ of the terms of the government’s golden share would enable creditors to sell their shares more easily and, not least, remove the current barrier to Zim’s participation in formal alliances.

An Israeli court had originally set a 29 June deadline to conclude negotiations, but it is understood that the company will now go to a district judge in Haifa to seek a solution to the impasse.

Zim’s creditors probably have no other option but to accept the delay to the restructure, but in terms of daily trading the uncertainty is not good news for the carrier.

It spilled a further $62m of red ink in the first three months of the year, after posting a net loss of $530m, and with freight rates still under pressure on all of its remaining tradelanes, it will probably haemorrhage more losses in the second half of the year.

It is surprising therefore that having announced that it was terminating its Asia-North Europe service in April, the Israeli carrier continues to be a bit player in the tradelane according to analyst Alphaliner.

Following a single sailing of the 6,350teu Zim Hamburg in early June, the carrier is set to make another ad-hoc trip with the 10,062teu Tianjin to North European ports, starting in Qingdao, China on 17 July, it reports.

According to Alphaliner’s analysis of the company’s accounts, gleamed from its capital restructuring plan, Zim has accumulated total operating losses of $453m on its Asia-Europe service in the past three years. It must be assumed that repositioning of the ships is the main motivation, while opening up the vessels for cargo bookings is a means to add revenue to the operation.

However, reactivating the hitherto idled Tianjin by Zim at the same time as carriers struggle to hold on to any gains obtained from general rate increases, will be unwelcome news for Mr Danieli’s peers.

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