Shipping Tycoon Seizes Opportunity Amid Global Supply Chain Chaos
Israel’s wealthiest individual, Idan Ofer, is cashing in on his investment in Zim Integrated Shipping Services, taking advantage of the surge in profits triggered by Houthi rebel attacks on vessels in the Red Sea. The disruptions have sent global supply chains into a tailspin, but carriers like Zim have reaped the benefits.
A Lucrative Exit
Ofer’s Kenon Holdings is selling approximately 30 million shares of Zim, valued at $719 million, through J.P. Morgan and Citigroup. This move comes after Kenon Holdings sold $111 million in Zim shares six months ago, with an option to sell more shares representing an additional 4.2% of the company. The latter option has been cancelled.
Zim’s Soaring Profits
Zim’s shares have skyrocketed by 260% over the past year, driven by record volumes and profits. In the third quarter, the company posted a profit of $1.53 billion, a stark contrast to its loss of $2.2 billion a year ago. Revenues also surged to $2.77 billion, up from $1.53 billion.
A Shift in Strategy
Ofer, a longtime investor in Zim, spun off Kenon Holdings from Israel Corp. in 2015. Kenon Holdings holds a 16.5% stake in Zim, which has a market capitalization of $2.86 billion. The sale of shares marks a significant shift in Ofer’s strategy, as he seeks to capitalize on the current market conditions.
Market Reaction
Shares of Zim closed 1.86% lower on Friday and were down 6.22% in pre-market trading on Monday, suggesting that investors are taking a cautious approach despite the company’s impressive profits.
A Year of Growth
Zim’s shares have appreciated by 260% over the past year, making it an attractive investment opportunity. As global supply chains continue to face challenges, carriers like Zim are poised to benefit from the increased demand for their services.
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