Zim Integrated Shipping Services Ltd. (NYSE: ZIM) today announced an eight-year agreement to charter three 7,000 TEU liquefied natural gas (LNG) dual-fuel container vessels. The $400 million agreement has been signed with a shipping company that is affiliated with Kenon Holdings Ltd. (NYSE: KEN; TASE: KEN), which is controlled by Idan Ofer, who is also the largest shareholder in Zim with a 26% stake. The vessels will be constructed at Korean-based shipyard, Hyundai Samho Heavy Industries and are scheduled to be delivered during the first and second quarters of 2024.
Zim demands reduction in tax liability
The agreement comes as the shipping industry is booming with large demand while industrial supply is restricted and follows other charter agreements since Zim held its IPO last January.
Zim president and CEO Eli Glickman said, “We are pleased to enter into another charter agreement to secure high quality tonnage, with a focus on adding extremely versatile vessels that could serve us on multiple trades. As we work to secure our core operating fleet to meet growing market demand, we remain committed to maintaining significant fleet flexibility to execute our proven global-niche strategy and best serve our customers. Importantly, adding “green” LNG-fueled capacity further strengthens ZIM’s position at the forefront of reducing carbon intensity among the global liners and will enable us to assist our customers in reducing their carbon footprint.”
He added: “This transaction further demonstrates our prudent capital allocation strategy, supporting our efforts to strengthen our commercial prospects, deliver industry leading profitability, and create enduring value for shareholders.”
Zim is traded on Wall Street with a market cap of $7.7 billion, after its share price has climbed 300% over the past year.
Last week “Globes” revealed that Zim has asked the government to enact the Tonnage Law, which would greatly reduce the amount of tax it pays on profits. Idan Ofer has distanced himself from the request and said that he knew nothing about it and if consulted would not have suggested making such a request.
Published by Globes, Israel business news – en.globes.co.il – on January 18, 2022.
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