ZIM Shipping Market Investment LTD. - Notice of launch of a bond tender offer

USA - English

• USA - English

HAIFA, Israel, Sept. 29, 2020 /PRNewswire/ -- ZIM Shipping Market Investments Ltd. (IL0065100443, IL0065100856) (the "Offeror") announces today an invitation to Holders (as defined in the Tender Offer Memorandum) of each series of notes set forth below (each, a "Series", and, together, the "Notes") to tender such Notes for purchase by the Offeror for cash at a price to be determined pursuant to a modified Dutch auction process (the "Offer"). The Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 29 September 2020 (the "Tender Offer Memorandum") prepared by the Offeror and is subject to the offer restrictions set out below under the heading "Offer and Distribution Restrictions" and as more fully described in the Tender Offer Memorandum.

For detailed terms of the Offer, please refer to the Tender Offer Memorandum, copies of which are (subject to distribution restrictions) available from the Information Agent, the Israeli Tender Agent and the website maintained by the Tel Aviv Stock Exchange ("Maya").

Capitalised terms used in this announcement but not defined herein have the meanings given to them in the Tender Offer Memorandum. Details of the Notes are set out in the table below:

[1]       Amounts are comprehensive with no further amounts payable for accrued and unpaid interest, including PIK Amounts.
[2]       All Holders of Notes that submit Tender Instructions which are accepted by the Offeror will receive the same Purchase Price. No PIK Amounts will be paid in respect of the Series 2 Notes.
[3]       Series 1 includes the Company's 3.0% Series 1A and Series 1B Senior Notes due 2023.
[4]       Series 2 includes the Company's 5.0% Series 2A and Series 2B Senior Notes due 2023. 

THE OFFER

The Offeror and the Rationale for the Offer

The Offeror is ZIM Shipping Market Investments Ltd., a newly incorporated wholly-owned subsidiary of ZIM Integrated Shipping Services Ltd. (the "Company"), which has been formed solely for the purpose of making the Offer. Pursuant to the terms of the indenture relating to the Notes dated 16 July 2014 (the "Indenture") between, among others, the Company and Hermetic Trustee (1975) Ltd., as trustee (the "Trustee"), the board of directors of the Company has designated the Offeror as an "Unrestricted Subsidiary" as such term is defined in the Indenture. Subsequent to such designation, the Company, as lender, and the Offeror, as borrower, entered into a loan agreement pursuant to which the Offeror may borrow up to US$60 million from the Company. The Offeror intends to use the proceeds of such loan to fund the Offer and pay expenses related to the Offer.

The Offer will provide liquidity, at a premium to the current observed market price, to those Holders whose Notes are accepted in the Offer.

The Notes purchased by the Offeror pursuant to the Offer are expected to be cancelled and will not be re-sold. Notes which have not been validly submitted and accepted for purchase pursuant to the Offer will remain outstanding.

Purchase Price

The Offeror will pay for Notes accepted by it for purchase pursuant to the Offer a cash purchase price (expressed as a percentage of the principal amount of Notes accepted for purchase pursuant to the Offer and rounded to the nearest 0.10 per cent. (with 0.05 per cent. rounded upwards)) (the "Purchase Price") determined in accordance with the modified Dutch auction procedures described in the Tender Offer Memorandum, and subject to the Minimum Purchase Price, as set out in the table above.

Acceptance Amount and Series Acceptance Amounts

Under the modified Dutch auction procedures described in the Tender Offer Memorandum, the Offeror will determine, in its sole discretion, the aggregate principal amount of Notes it will accept for purchase pursuant to the Offer (the "Acceptance Amount"), the resulting aggregate principal amount of Notes (if any) of each Series (each such amount, a "Series Acceptance Amount") it will accept for purchase pursuant to the Offer and a single cash purchase price for each US$1.00 in principal amount of Notes at which it will purchase Notes on the Settlement Date, that have been validly tendered pursuant to the Offer, taking into account the Maximum Aggregate Consideration Amount, the Minimum Purchase Price and the aggregate principal amount of Notes so tendered and the prices at which such Notes are so tendered (or deemed to be tendered), as set out in the Tender Offer Memorandum.

Maximum Aggregate Consideration Amount

The maximum aggregate amount of consideration that the Offeror will make available to purchase the Notes will not exceed US$58,500,000 (the "Maximum Aggregate Consideration Amount"). The Offeror reserves the right (subject to applicable laws and contract) to increase the Maximum Aggregate Consideration Amount in its absolute discretion. The Offeror reserves the right, in its absolute discretion, to purchase more or less than the Maximum Aggregate Consideration Amount, subject to applicable law and contract.

Accrued Interest and PIK Amounts

The Purchase Price is comprehensive and, accordingly, the Offeror will not pay accrued interest on the Notes accepted for purchase pursuant to the Offer. No PIK Amounts (as defined in the Indenture) will be paid in respect of the Series 2 Notes. (See "Risk Factors and Other Considerations — No Accrued Interest, including PIK Amounts, will be paid by the Offeror" in the Tender Offer Memorandum for more information).  

The Offeror is not under any obligation to accept for purchase any Notes tendered pursuant to the Offer. The acceptance for purchase by the Offeror of Notes tendered pursuant to the Offer is at the sole discretion of the Offeror and tenders may be rejected by the Offeror for any reason.

Tender Instructions

For Holders holding Notes through a participant of Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream"), in order to participate in the Offer, and be eligible to receive the Purchase Price pursuant thereto, such Holders must validly tender their Notes for purchase by delivering, or arranging to have delivered on their behalf, an Electronic Instruction (as defined in the Tender Offer Memorandum) in accordance with the procedures of Euroclear and Clearstream. Holders holding Notes through a participant of Euroclear and Clearstream should contact the Information Agent for more information on how to participate in the Offer.

For Holders holding Notes through a Member (a "TASE Member") of the Tel Aviv Stock Exchange Ltd. (the "TASE") and not Euroclear or Clearstream, in order to participate in the Offer and be eligible to receive the Purchase Price pursuant thereto, such Holders must validly tender their Notes by delivering an Acceptance Notice in accordance with the procedures set forth in the Tender Offer Memorandum. Holders holding Notes through a TASE Member should contact the Israeli Tender Agent for more information on how to participate in the Offer. Beneficial owners may also contact their broker, dealer, commercial bank, trust company or other nominee (each, a "Custodian") for assistance concerning the Offer.

Holders must follow certain procedures to tender Notes for purchase pursuant to the Offer. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum for more information.

Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

Tender Instructions must be submitted in respect of a minimum principal amount of Notes of no less than US$1.00, and may be submitted in integral multiples of US$1.00 thereafter. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum for more information.

EXPECTED TIMETABLE OF EVENTS

The times and dates below are indicative only.

The above times and dates are subject to the right of the Offeror to extend, re-open, amend, and/or terminate the Offer (subject to applicable law and as provided in the Tender Offer Memorandum). Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer before the deadlines specified in the Tender Offer Memorandum. The deadlines set by Euroclear or Clearstream, the relevant TASE Member and any such other intermediary through which Notes are held for the submission and withdrawal of Tender Instructions may be earlier than the relevant deadlines specified above. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum.

RECENT DEVELOPMENTS

The Company has informed the Offeror that it expects that its results of operations and free cash flow in the third and fourth quarters will reflect an acceleration of the business improvement reflected in the first half of 2020.  As a result of the combination of this acceleration of business improvement, together with the expected positive impact of seasonality that is generally experienced in the container shipping industry in the third and fourth calendar quarters, the Company expects its results of operations and free cash flow for the remainder of the 2020 financial year to represent a significant improvement as compared to its past results, including the trends anticipated in the second quarter of 2020. In addition, as indicated in the Company's financial statements for the period ending on 30 June 2020, which were published on 19 August 2020, the Company continues to explore options which may contribute to strengthen its capital structure including by way of private or public equity and/or debt issuance. It is currently considering the possibility of initially offering its securities to the public and to that end retained the services of reputable international investment banks to assist it in this process. THIS STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE.

None of the Company, the Offeror, the Dealer Manager, the Information Agent, and/or the Israeli Tender Agent (or any of their respective directors, officers, employees, agents or affiliates) makes any recommendation as to whether Holders should tender Notes pursuant to the Offer.

FURTHER INFORMATION

Holders are advised to read the Tender Offer Memorandum carefully for full details of and information on the procedures for participating in the Offer.

Barclays Bank PLC is acting as Dealer Manager, Lucid Issuer Services Limited is acting as Information Agent, and I.B.I. Israel Brokerage and Investments Ltd. is acting as Israeli Tender Agent for the Offer.

Questions and requests for assistance in connection with the Offer may be directed to the Dealer Manager:

Barclays Bank PLC
5 The North Colonnade
Canary Wharf
London E14 4BB
United Kingdom

Telephone: +44 203 134 8515
Attention: Liability Management Group
Email: [email protected]

Questions and requests for assistance in connection with the procedures for participating in the Offer, including the delivery of Tender Instructions, may be directed to the Information Agent or the Israeli Tender Agent:

The Information Agent

Lucid Issuer Services Limited
Tankerton Works 12 Argyle Walk
London WC1H 8HA
United Kingdom

Telephone: +44 20 7704 0880
Attention: Thomas Choquet / Mu-yen Lo
Website: www.lucid-is.com/zim
Email: [email protected]

The Israeli Tender Agent

I.B.I. Israel Brokerage and Investments Ltd.
9 Ahad Ha'am Street
Tel Aviv, Israel

Telephone: +972-54-307-2594
Attention: Anat Zacharias
Email: [email protected]

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If any Holder is in any doubt as to the contents of this announcement and/or the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, immediately from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offer. The Dealer Manager is acting exclusively for the Offeror and no one else in connection with the arrangements described in this announcement and the Tender Offer Memorandum and will not be responsible to any Holder for providing the protections which would be afforded to customers of the Dealer Manager or for advising any other person in connection with the Offer. None of the Company, the Offeror, the Dealer Manager, the Information Agent, and/or the Israeli Tender Agent (or any of their respective directors, officers, employees, agents or affiliates) has made or will make any assessment of the merits and risks of the Offer or of the impact of the Offer on the interests of the Holders either as a class or as individuals, and none of them makes any recommendation as to whether Holders should tender Notes pursuant to the Offer. None of the Company, the Offeror, the Dealer Manager, the Information Agent, and/or the Israeli Tender Agent (or any of their respective directors, officers, employees agents or affiliates) is providing Holders with any legal, financial, business, investment, tax or other advice in this announcement and/or the Tender Offer Memorandum. Holders should consult with their own advisers as needed to assist them in making an investment decision and to advise them whether they are legally permitted to tender Notes for cash.

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Company, the Offeror, the Dealer Manager, the Information Agent, and the Israeli Tender Agent to inform themselves about, and to observe, any such restrictions.

United States

The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each Holder of Notes participating in the Offer will represent that it is not located in the United States and it is not participating in the Offer from the United States, or it is acting on a non- discretionary basis for a principal located outside the "United States" that is not giving an order to participate in the Offer from the United States. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Israel

The Offer is not subject to the tender offer regulations under the Israel Securities Law, 5728-1968, and the Tender Offer Memorandum has not been filed with or reviewed or approved by the Israel Securities Authority or the Tel Aviv Stock Exchange Ltd.

Italy

None of the Offer, this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer has been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa ("CONSOB"). The Offer is being carried out in the Republic of Italy ("Italy") as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act") and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999.

Holders or beneficial owners of the Notes can tender some or all of their Notes pursuant to the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes and/or the Offer.

United Kingdom

The communication of this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order")) or persons who are within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (together, "relevant persons"). Any investment or investment activity to which this announcement and the Tender Offer Memorandum relates is available only to, and will be engaged in only with, relevant persons (and is subject to the other restrictions referred to in the Financial Promotion Order).

France

The Offer is not being made, directly or indirectly, to the public in the Republic of France ("France"). None of this Announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offer has been or shall be distributed to the public in France and only qualified investors (investisseurs qualifiés) other than individuals, in each case acting on their own account and all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code Monétaire et Financier, are eligible to participate in the Offer. This Announcement, the Tender Offer Memorandum and any other document or material relating to the Offer have not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.

General

This announcement and the Tender Offer Memorandum do not constitute an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Holders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue-sky or other laws require the Offer to be made by a licensed broker or dealer and the Dealer Manager or any of its respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by the Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.

In addition to the representations referred to above in respect of the United States, each Holder participating in the Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in "Procedures for Participating in the Offer" in the Tender Offer Memorandum. Any tender of Notes for purchase pursuant to the Offer from a Holder that is unable to make these representations will not be accepted. Each of the Offeror, the Dealer Manager, the Information Agent and the Israeli Tender Agent reserves the right, in its absolute discretion, to investigate, in relation to any tender of Notes for purchase pursuant to the Offer, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result the Offeror determines (for any reason) that such representation is not correct, such tender shall not be accepted.

THIS ANNOUNCEMENT INCLUDES FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS RELATE TO EXPECTATIONS, BELIEFS, PROJECTIONS, FUTURE PLANS AND STRATEGIES, ANTICIPATED EVENTS OR TRENDS AND SIMILAR EXPRESSIONS CONCERNING MATTERS THAT ARE NOT HISTORICAL FACTS.  THESE STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS ABOUT THE FINANCIAL HEALTH OF THE COMPANY.  THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES.  IN PARTICULAR, THE CONTAINING SHIPPING INDUSTRY IS DYNAMIC AND VOLATILE AND HAS BEEN MARKED IN RECENT YEARS BY INSTABILITY AS A RESULT OF GLOBAL ECONOMIC CONDITIONS AND THE MANY CONDITIONS AND FACTORS THAT AFFECT SUPPLY AND DEMAND IN THE SHIPPING INDUSTRY. GIVEN THESE RISKS AND UNCERTAINTIES, YOU SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AS A PREDICTION OF ACTUAL RESULTS.

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SOURCE ZIM Integrated Shipping Services Ltd.