ZIM Lines going public on NYSE not delivering the expected results
The Israeli shipping company has raised $218 million at $15 per share, below the $16-$19 range announced last week.
Israel-based global container company Zim Integrated Shipping Services Ltd. has raised $218 million in its initial public offering (IPO) on the New York Stock Exchange (NYSE). The company sold 14,500,000 ordinary shares at a price of $15.00 per ordinary share, at a company valuation of $1.75 billion, after money, below the price range of $16-$19 per share cited by the company last week when it announced terms.
Zim has granted the underwriters a 30-day option to purchase up to an additional 2,175,000 shares at the initial public offering price. If these options are exercised then the amount raised by Zim will rise to $250 million. The company valuation of $1.78 billion, after money, is disappointingly below last week’s estimates of a company valuation of between $1.9 billion and $2.3 billion but above expectations over the past few months of a $1.5 billion valuation.
ZIM trying to capitalise on the present container market growth
Shares will begin trading on the NYSE later today, under the ticker symbol ZIM, and the offering is expected to close on February 1, 2021, subject to customary closing conditions.
Citigroup, Goldman Sachs & Co. and Barclays acted as global coordinators in the offering and Jefferies and Clarksons Platou Securities were joint bookrunners. Having improved its financial results with CEO Eli Glickman at the helm, the company has taken advantage of the market boom.
The offering did not include offers for sale by existing shareholders. Zim’s biggest shareholder is Kenon Holdings (NYSE: KEN; TASE: KEN), which had a 32% stake in Zim that has been diluted to 27.2%. Deutsche Bank had a 15.7% stake in Zim, diluted to 13.4%, and Danaos Corporation had a 10.2% stake, diluted to 8.7%. The State of Israel holds a golden share, which prevents Kenon from selling its holdings to third parties.
In the past Zim has carried out debt settlements. The first was in 2009 following the financial crisis when the shipping company was mired in $7 billion worth of debt and the second was in 2014, when the company implemented a more than 50% haircut, chopping its debt to bondholders in Tel Aviv from $3.4 billion to $1.4 billion. At the end of the third quarter of 2020, Zim remained with $1.5 billion in long-term debt and had $350 million in cash.
Photo: StockStudio Aerials / Shutterstock.com