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JERUSALEM Oct 5 Israeli shipping company Zim, which has been hit hard by the weak global shipping market, said on Wednesday it was planning to defer $115 million of upcoming payments to creditors until 2018.
Zim said in its second quarter report that it had agreed with some of its creditors to defer payments for a 12-month period, which began on Sept 30, until the start of 2018.
Some of the deferrals are still subject to final due diligence, documentation and approvals.
Zim, whose total liabilities are $1.8 billion, on Wednesday reported a second-quarter loss of $74.2 million, versus a profit of $12.1 million a year earlier. Income from voyages dropped to $612 million from $763 million.
The container shipping industry has suffered from a prolonged global economic crisis, the company said, characterised by slower growth of demand and worsening overcapacity.
In response, carriers, looking to protect their market share, have allowed freight rates to fall sharply, Zim said.
"Freight rates may remain at depressed levels for some time, which could adversely affect the company's revenue and profitability," it said. "Current economic conditions make forecasting difficult, and there is possibility that actual performance may be materially different from management plans and expectations."
Zim has had to restructure its debt in the past, and this latest deferral comes shortly after larger rival, Hanjin Shipping Co of South Korea, sought court receivership in August.
Zim is 32 percent held by Kenon Holdings, with the remainder held by financial institutions and ship owners. (Reporting by Ari Rabinovitch. Editing by Jane Merriman)
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