A year and half ago I thought that shipping will be a moneymaking machine and bought some ZIM shares (through Israel Corp.). ZIM had ambitious expansion plans and ordered several large new ships. With the current contraction in international trade, ZIM became a sour lemon.
Israel Corp expects the current problematic situation in the shipping industry will continue through 2009 and 2010, and only in 2011 will a gradual improvement begin. Along the same lines, Zim is asking creditors for concessions. That is, the company is not sure it can pay its debts on time. Zim expects that between 2009 and 2013, it will face a cash flow deficit of about $1 billion.
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