The rattlesnake method (2) – Idan Ofer issues Zim worth $ 2.2 billion – Capital market

16 years ago, the government-owned Zim company was sold to the Ofer brothers for $ 230 million. Value on the face of it looks low. Mickey Rosenthal in his film The Shakshuka Method, which expresses the capital-government relationship, brings an interview with an attorney of the Ofer brothers, Ram Caspi, who explains that they did the Shakshuka method. This video has become a description of the trading method and capital-government relationship. Not sure right. Caspi in total tried to explain that they did some kind of average to the valuations obtained.

In any case, at first it seemed that the Ofer brothers had made a good deal – that they had made a shakshuka for the state. but Within two or three years it turned out that Zim was worth zero. It turned out, in fact, that the state did shakshuka to the Ofer brothers.

Zim’s rise and fall in value are due to the global transportation market, a volatile market that is very difficult to predict. Zim went through a difficult 10 years and two debt settlements under which institutional entities received shares in parallel with the debt settlements. The Ofer family through the Canon Company (which was split from the Israel Company) remained the largest shareholder in Zim. No one gave value to this activity, until about two years ago a revolution began – both efficiency and the transportation market came back to life and in the last year it is really in heaven. ZIM is worth $ 2.2 billion for the IPO. Now the era of Ofer is making a shuffle for Wall Street investors. (Shakshuka Method 2) And seriously – The “rattle method” is a phrase that has caught on, but the problem is that no one knows who is actually making a rattle for whom.

And to the IPO itself ZIM Shipping Company (32%) by

canon
+ 5.25%

Base:9,340

opening:9,622

Tall:10,000

low:9,622

change:16,691,035

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Of Idan Ofer has published a prospectus for an IPO on the New York Stock Exchange next week. The company will raise $ 322-382.3 million at a value of $ 1.8-2.2 billion. Zim will issue 17.5 million shares to the public at a price of $ 16-19 per share. The offering will be led by Citigroup, Goldman Sachs and Barclays, along with Jeffries and Norwegian investment bank Clarksons Platou Securities. Underwriters will be given a 30-day option to purchase 2.6 million shares of Zim.

In recent months, it has been announced that the shipping company intends to issue, with Wall Street also being considered as an option alongside Wall Street. Initial reports spoke of a value of $ 0.5-1 billion, and those who came after them estimated the value of the IPO at $ 1.3 billion. Now, the upper end of the price range revealed by Zim reflects its value almost twice as high as recent estimates.

Zim enjoyed an increase in sea freight prices, both against the background of the competitive price compared to air freight and also due to the growing demand for shipments due to the strengthening of online purchases. Thus, Zim has opened three new transport lines in the past year. The company also promoted monitoring and conducting digital tools in front of its customers, a move aimed at maximizing profitability, and it also became Alibaba’s sole exporter from China.

Among the risk factors noted by ZIM in the prospectus are the instability that characterizes the shipping industry, which is affected by geopolitical changes such as the US-China trade war, as well as an increase in container container capacity that may push down transportation costs and bite into company profits.

The company, managed by Eli Glickman, owns one ship and leases another hundred. As of the end of September, it operated 66 lines worldwide, anchored at 310 ports in more than 80 countries. Zim closed the third quarter of 2020 with revenues of about $ 1 billion, compared to $ 840 million in the same period last year, as well as a net profit of $ 142 million – much higher than the $ 5 million profit in the third quarter of 2019. Operating profit was 18.6% ($ 189 million). ) Compared to 5.4% in the corresponding period last year. As of the reporting period, the company is in a deficit of $ 100 million in equity.

The company’s estimates for the entire 2020 results predict revenue of about $ 4 billion, compared to $ 3.3 billion in 2019, and a profit of $ 500-525 million, compared to a loss of $ 13 million in 2019. Along with Canon, the most prominent holders in ZIM today are Deutsche Bank (16.7%) and the Greek container company Danaus (10.2%).