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Israel’s Zim to write off $72 mln from ship order cancellations
JERUSALEM - Israeli shipping company Zim will write off $72 million in its 2013 financial results due to the cancellation of an order for four vessels, its parent company said on Thursday.
Zim in 2007 ordered four 8,800 twenty-foot equivalent unit (TEU) ships but cancelled them, along with orders for larger ships, a year ago.
It would have had to pay $1.5 billion for the vessels but all that Zim lost was a small down payment.
Zim will not need to pay any more amounts to the shipyards, it said in a statement to the Tel Aviv Stock Exchange.
The deals were cancelled a year ago as part of a new business plan and as the ships are far cheaper today - $100 million versus $170 million - and more efficient.
Israeli media said Zim cancelled the deals with Hyundai Heavy Industries and Samsung Heavy Industries .
Last month, Zim reached a restructuring deal with most of its creditors that will see part of its debt swapped for shares.
Zim, hit hard in recent years by a faltering global economy, agreed to cut its overall liabilities to between $1-$1.5 billion from about $3 billion, with part of its debt being written off.
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