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

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”).

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.

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:
Source: ZIM Shipping

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