Roundup / Hutchison clammy to Partner buyback?
Clal sells Guard Financial for less than hoped, Shimshon gas well operator dries up, bus riders spared a price hike – for now.
China's Hutchison cooling on buying Partner back? As last week rolled to a close, the two Israeli companies that control Partner Communications, Suny Electronics and its subsidiary Scailex, postponed special shareholder assemblies. The assemblies had been called to vote on Suny selling its 75% controlling interest in Scailex to Hutchison Whampoa of Hong Kong. Hutchison had originally sold Partner, one of Israel's three big mobile operators, to Suny. Neither Scailex nor Suny said why the meetings have been postponed from this Thursday to September3. TheMarker has discovered that Hutchison's top brass held urgent meetings in Hong Kong over the weekend to which Hutchison's representative in Israel, Dan Eldar, was summoned. Reportedly the Hutchison people are having second thoughts about the format of the deal, or whether to pursue it at all.
Going-concern warning for IDB Holding Corp? Auditors of the company at the top of the IDB pyramid of companies are discussing whether to attach a going-concern warning to the company's second-quarter financial statement, which is due next week. A spokesperson for IDB commented that there "is no reason and there isn't likely to be a reason" for a going-concern warning, which means the auditors have doubt whether the company can meet its liabilities in a timely manner. In its first-quarter statement, IDB Holding Corp reported an NIS 634 million deficit in shareholder equity, meaning surplus liabilities over assets. But it didn't get a going-concern warning because in its cash flow forecast, the company said it could meet its liabilities through two years (through to the first quarter of 2014). The question is whether it still can meet liabilities through two years, to the end of the 2014 second quarter.
IDB sells Guard Financial: In other news of the IDB group, which is controlled by Nochi Dankner, yesterday its arm Clal Insurance Enterprises finally struck an agreement to sell its U.S. insurance unit, the Guard Financial Group, to a marquee buyer. Nebraska-based National Indemnity Co., a unit of Warren Buffett's Berkshire Hathaway, will be paying just $221 million for Guard, far less than the valuation of $250 million to $315 million Clal had hoped to get. The price is about equal to Guard's book value. Clal had bought Guard, which specializes in workmen's compensation insurance and operates in 28 U.S. states, five years ago for $107 million.
U. Dori shifts to black: The engineering group U. Dori shifted to the black in the second quarter of 2012, reporting a 63% year over year surge in revenues to NIS 456 million. The company, which builds housing and infrastructure in Israel and Poland, netted NIS 2 million, compared with losing NIS 22 million in the corresponding quarter the year before.
VAT hike won't reach bus riders: In September, in case you forgot, VAT will be rising from 16%to 17% (mark the date!) But the increase won't reach public transportation, not because of any particular largesse for the poor, but because public transportation prices are only revisited twice a year, in January and July, and that's by law. The government can't just up and change the prices because it feels like it and therefore, bus travel prices won't be rising before January 2013. The last time the government jacked up bus prices was in January 2012, by 3%. At present taking a city bus costs NIS 6.60.
Shimshon operator files for Chapter 11: ATP, the company that owns ATP East Med which is drilling for oil at the Shimshon deep-sea prospect, has filed for bankruptcy in the U.S. courts. ATP owns 40% of the licenses Shimshon, Daniel East and Daniel West. Earlier this month ATP advised its Israeli partners Isramco, INOC (locally called Hanal) and Naphtha that it had competed production tests at Shimshon, which based on initial estimates has about 65 billion cubic meters of gas. The tests proved there is gas there, at 4,100 meters, but the gas-bearing layer is thinner than thought, at just 19 meters, versus initial estimates based on seismic tests of 31 to 117 meters. Testing has continued but under the circumstances of ATP's bankruptcy, uncertainty abounds.
With reporting by Amitai Ziv, Sivan Aizescu, Itai Trilnick, MichalRamati and Michael Rochvarger