Emboldened by its improved financial results, Zim Israel Navigation Co. will renew efforts to make a public offering to American investors, its top U.S. official confirmed Monday.
"It's imminent," said Eli Steinbuch, president of Zim-American Israeli Shipping Co. in New York, referring to Zim's plans to offer its stock on the New York Stock Exchange."We're confident we're able now to interest" investors, he said.
If Zim is successful in making its offering, it will become one of only three companies operating large ocean liner fleets that are listed on the exchange. It would be the only one that is purely an ocean shipping business in its U.S. operations. The others - American President Cos. and CSX Inc. - have extensive intermodal operations.
Traditionally, maritime companies have had difficulty finding as great a success for their stocks on American exchanges as on foreign stock exchanges, in part due to the cyclical nature of the industry.
It is that cyclical nature that helped frustrate Zim's last effort to float its stock on the New York exchange in 1992 as part of a wider effort by the Israeli government to privatize some of its holdings. The carrier was forced to withdraw its plans amid financial pressures that had it post a $1.3 million loss that year.
But the Haifa-based carrier experienced the beginning of a turnaround last year with a profit of $18.2 million. The carrier's results have continued to improve in the first half of this year, allowing the line to report a profit for the first six months greater than its profit for all of last year.
Zim earned $19 million in the first six months of this year, up from $9.1 million reported in the first half of 1993. Revenue in the period was $628 million, up from $608 million.
The company is one of the world's largest container operators. It was the 13th largest container operator during the second quarter in the U.S. trades, according to Trade Horizons, a forecasting service of The Journal of Commerce, with a total of 64,586 20-foot equivalent units (TEUs) moved in and out of the country in that time.
The carrier also has extensive operations that do not call at U.S. ports, including services linking Europe with South Africa and Israel with North Europe. It has about 50 containerships in its fleet. Zim also operates more than 30 ships of other types than strict container vessels.
Capt. Efraim Marcowitz, a leader of the Israeli Sea Officers Union, said labor leaders are unlikely to oppose the privatization.
"Our experience had been much better with private owners than with Zim Lines," he said.
Although he called the listing imminent, Mr. Steinbuch said he could not say whether it would come by the end of the year, but he confirmed that Matty Morgenstern, Zim's president, would be visiting New York in October.
New York shipping stock analysts said they had yet to hear details of Zim's proposed offering, but one analyst said its success or failure would depend on the details themselves. "If the story is compelling, you can always attract investors," the analyst said.