Ship's Bow

WFW and AMA Capital Partners advise BNP Paribas on US$455 million ZIM restructuring

18 August 2014

Watson, Farley & Williams (“WFW”), a leading international law firm, is pleased to announce that it has, together with AMA Capital Partners, advised BNP Paribas as lender and facility agent for a syndicate of banks on two ECA-backed loan facilities (supported by The Export-Import Bank of Korea (KEXIM) and Korea Trade Insurance Corporation (K-Sure), respectively), in relation to the over US$3 billion global restructuring of ZIM Integrated Shipping Solutions Ltd (“ZIM”).

The complex structure was implemented to remove the five Liberian shipowning SPVs (and the five ships owned by those SPVs and the related debt finance) from the ZIM group by transferring the shares in those SPVs to a new Liberian SPV holding company (the “VesselCo”) controlled by an unrelated third party. Having sold the shipowning SPVs to the VesselCo, ZIM has time-chartered the five vessels from the VesselCo for an initial period of 10-12 years enable to ZIM to continue to use of these flagship vessels (three x 10,062 TEU and two x 8,440 TEU container ships) in their business.

WFW advised BNP Paribas on the implementation of the VesselCo structure, which involved the amendments to the existing financing and the sale of the SPVs to the VesselCo. The firm also advised on the new chartering and management arrangements with ZIM and ship managers NSC Shipping.

The VesselCo arrangements were part of a wider global restructuring of ZIM that involved, inter alia, Israel Corporation injecting US$200 million into ZIM and the write-off of approximately US$1.4bn of debt (in exchange for 68% of equity in ZIM).

ZIM is one of the largest carriers in the global container shipping industry, with a fleet comprising 89 vessels, 17 fully or partly owned, and a global reach that extends to over 120 countries.

The WFW team involved lawyers from the London, Paris, Singapore and New York offices of WFW and was led by London partner and Chairman Frank Dunne and partner and Head of Maritime Lindsey Keeble, supported by a team including senior associates Michael Savva (on the finance aspects) and Sandy Apostolatou (on the chartering and ship management aspects). London partner Mark Tooke and senior associate Dan Saunders advised on sale of the SPVs and related corporate matters. WFW New York advised on the Liberian law aspects of the deal.

WFW London partner Frank Dunne, said:“We are pleased to have been able to work alongside AMA in advising BNP Paribas, one of the world’s leading lenders into the maritime industry, on this innovative deal. By rearranging ZIM’s debt obligations and restructuring the nature of the ownership of these vessels, it will hopefully provide the company with the ability to return to profitability with the improvement in the container shipping market.”

Kevin O’Hara of AMA Capital Partners commented: “We are very happy to see the innovative VesselCo structure come to fruition. While any restructuring can be trying, this could only be done through the cooperative efforts of BNP Paribas, Watson, Farley & Williams and ZIM and its advisors. The structure itself took shape as a result of creative and open thinking amongst all parties and AMA believes it will serve the interests of both ZIM and the BNP Paribas-led syndicates going forward”.