Israel’s ZIM Shipping amends 3% series 1, 5% series 2 notes due 2023

By Cady Vishniac

Detroit, Dec. 24 – ZIM Shipping Market Investment Ltd. has amended the indentures of its 3% series 1 senior notes due June 20, 2023 (ISINs: IL0065100443 and IL0065100773) and 5% series 2 senior notes due 2023 (ISINs: IL0065100856 and IL0065100518) due June 21, 2023, according to a press release.

The following amendments have been made to the indentures of the notes:

• The definition of the international financial reporting standards has been updated. Leases that would have been classified as operating leases before IFRS 16 will continue to be excluded from the debt and acquired debt categories under the restriction on debt incurrence but are not excluded when calculating the consolidated leverage ratio;

• The consolidated leverage ratio restriction on ratio debt or acquired debt has been removed from the debt incurrence covenant;

• In order to allow for increased vessel financing, the 85% restriction on incurrence of capitalized leases of uncompleted vessels has been removed, and ZIM may now incur capitalized leases in any percentage of the contract price;

• The requirement to have 15% to 25% of cash for vessel financing sourced from ring-fenced cash has been removed;

• Addition of a restricted payment builder basket to permit dividends equivalent to 50% accumulated consolidated adjusted net income or minus 100% of consolidated net losses, starting from the first day of the quarter in which an initial public equity offering by ZIM occurs, plus the aggregate net equity contributions received after the date of an IPO, with ZIM’s ability to use the builder basket restricted in the case of any default or event of default having occurred or resulting from the proposed restricted payment;

• Addition of a post-IPO restricted payment basket to permit dividends in any fiscal year of up to 5% of the net cash proceeds, with dividends under this basket reducing the builder basket;

• Amendment to the reporting covenant requirements such that ZIM will be in compliance so long as it is in compliance with the public reporting requirements of any stock exchange on which its ordinary shares have been listed, including the Stock Exchange of Hong Kong, the main market of the London Stock Exchange, the Nasdaq and the New York Stock Exchange; and

• Removal of a restriction on ZIM making open market purchases of its notes.

The company also repurchased $54,391,846 of the series 1 notes at an 80% purchase price in October as part of a tender offer for the series 1 and 2 notes. No tenders of series 2 notes were accepted in the offer.

ZIM Shipping is an Israel-based international cargo shipping company.

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