Deutsche Bank is on course to make up to $1 billion on a long-shot bet on Israeli shipping firm Zim after it surged in value on the back of record-high global freight rates, Bloomberg reported on Tuesday.
Citing unnamed sources familiar with the matter, the report said that Mark Spehn, a distressed debt trader at the German bank, had wagered less than $100 million over the past five years on building a position in the company through bond and bank loans as shipping rates fell.
Zim recovered to float on the stock market on Jan. 28 this year and has almost tripled in value since, yielding hefty gains for its backers and making it among the most successful of recent initial public offerings.
According to Refinitiv data, Deutsche Bank is the company’s second largest shareholder with a 13.68% stake, worth $923 million.
Zim said on June 4 that Deutsche Bank had been among those to sell shares in the company in a secondary offering worth $279 million.
If true, the numbers would make the Zim trade one of the most profitable for the bank since its asset-backed securities division made bets against the U.S. subprime sector in the run up to the 2008 financial crash, raking in almost $2 billion.
Source: Marine Link