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March 3, 2009

Zim CEO replaced

Israel Corporation has moved swiftly to replace Doron Goder, who resigned yesterday as CEO of its container shipping unit, Zim Integrated Shipping Logistics.

Today it announced that 31-year Zim veteran Rafi Danieli would move up to CEO from his roles as deputy CEO and deputy CFO "following an orderly transition of office and responsibilities" with Mr. Goder.

Mr. Goder resigned "due to differences in approach relating to Zim's plans in view of the global financial crisis."

Zim is the world's 17th largest container line and until the current crisis struck had been embarked on an aggressive expansion and newbuilding plan.

Israel Corporation injected $246 million into Zim in 2008 and has said it was willing to inject a further $150 million this year.

Last month though, after reports surfaced that Zim was seeking to cancel a number of newbuilding orders, Israel Corporation said that "within the scope of adjusting the strategic plan to the current market conditions" Zim was taking measures that included negotiations to cancel newbuildings; the return of some leased ships to their owners at the end of the contracted lease periods; reducing activity in certain markets; laying up ships; studying the feasibility of exiting from investments in areas associated with liner shipping; reduction in administration expenses, including laying off employees.

Israel Corporation said that 16 ships, accounting for 20.9% of its TEU capacity had already been laid up and that this total was expected to grow.

Israel Corporation also said Zim had been renegotiating financing arrangements with its banks.

Although the Israel Corporation statement gave no specifics, among the contracts Zim is understood to be trying to renegotiate are one for nine 12,500-TEU ships at South Korea's Samsung Heavy Industries.


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