Business in Brief
Bank Hapoalim to lay off hundreds in another round of cost-cutting; Koor divests final remaining Credit Suisse stake.
Koor divests final remaining Credit Suisse stake
Koor Industries, the IDB company, said Thursdayit sold its last remaining shares in Credit Suisse for 110.1 million Swiss francs ($121 million). The company said 33.2 million francs went to repay loans from Morgan Stanley and Citibank, for which the Credit Suisse shares had served as collateral. Since August, Koor has sold 897 million francs’ worth of Credit Suisse shares. On the deal, Koor said it expects to declare a net gain of 35 million shekels for the fourth quarter of 2013 and 64 million shekels for the first quarter of 2014. At its peak, Koor had a 3.2% stake in the Swiss bank. (Shelly Appelberg)
Bank Hapoalim to lay off hundreds in another round of cost-cutting
Bank Hapoalim is preparing a cost-cutting program, its third under CEO Zion Kenan, that calls for the dismissal of hundreds of staff at its headquarters. Management expects profits to fall amid a low interest-rate environment and tighter regulation. Those working under a collective labor agreement will be offered voluntary retirement, while those working under personal contracts will be laid off, and others will be moved to branch offices. Hapoalim also plans to shutter branches, mainly in larger cities as more clients use the Internet, automated teller machines and telephones for transactions. In other belt-tightening programs by Keinan since 2009, Hapoalim cut staffing by about 1,000. (Sivan Aizescu)
Zim creditors reach deal on giant debt accord
In the biggest debt pact ever in Israel, Zim Integrated Shipping reached an agreement in principle with its creditors overnight Wednesday that will cut its $3 billion in obligations by half. The agreement still needs the approval of the Israel Securities Authority and the shareholders of all the companies involved. The deal would see Israel Corporation lose control of the shipping company. The debt-for-equity portion of the deal would leave the holding company, controlled by Idan Ofer, with just 30% of Zim, down from 100% today. Under the agreement, Israel Corporation will have to inject $200 million of fresh cash into Zim. (Yoram Gabison)
N.Y.’s Zarasai Group raises NIS 350 million in Tel Aviv
The New York real estate company Zarasai Group completed a 350-million-shekel ($100.5 million) bond sale o Thursday, its second on the Tel Aviv Stock Exchange. Zarasai has a property portfolio worth about $800 million that includes more than 8,000 apartments and about 160 residential buildings in New York, nearly all of them covered by the city’s rent stabilization regulations. The bonds maturing between 2017 and 2026 were sold at a relatively low 5.05% interest rate, just 240 basis points above equivalent government debt. Zarasai, controlled by Joel Weiner’s New York-based Pinnacle Group, raised 400 million shekels last February. (Eran Azran)
Plunging Bezeq shares leave Tel Aviv Stock Exchange lower
The Tel Aviv Stock Exchange’s TA-25 index ended down 0.25% Thursday at 1,348.95 points while the broader TA-100 edged down 0.08% to 1,244.20. Turnover was 1.46 billion shekels ($418.3 million). Despite the decline, the TA-25 was up 1.9% for the week while the TA-100 added 2.1%. Bezeq slumped 4% in heavy trading after the company said the government’s plan for a wholesale telecommunications market would “negatively impact” its financial results. Bezeq’s parent company B Communications dropped 7%. Israel Chemicals extended its rally to add 5.6% on a brighter outlook for world potash prices. The government’s 10-year shekel bond rose 0.2% to cut its yield to 1.46%.The dollar rose 0.3% to a Bank of Israel rate of 3.4920 shekels, while the euro added 0.2% to 4.7516 shekels.
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