Roundup / Kaman seeks shelter
Drillers come up empty-handed at Myra natural gas site; cigarettes fuel steep climb for consumer price index; Israeli elections on the way if a budget agreement can't be reached.
Facing the debt: After a year of fruitless efforts to reach agreement with bondholders and banks on restructuring its debt, Kaman Holdings' controlling shareholder Roni Elroy urgently asked for protection from creditors last week. Elroy, son-in-law of energy and property baron Yitzhak Tshuva, applied for a stay of proceedings at the Tel Aviv District Court on Friday. Kaman owes its creditors NIS 725 million. The impetus for his motion was that earlier on Friday, Discount Bank – the company's main banking creditor, which opposes proposed debt arrangements – advised Kaman in writing that it was calling in NIS 325 million in debt.
Myra is dry: During the Rosh Hashanah break, ILD Energy published the results of its actions at the Myra-2 drill site, and sorry results they were. After investment of some $93.5 million, no oil or gas was found at the target layer, at a depth of 5,200 meters. The drilling equipment has been moved to Sara, a nearby prospect.
Up in a puff of smoke: The consumer price index climbed by a steep 1% in August compared with the month before, thanks in part to the 14% increase in the price of cigarettes. That in turn was due to the government jacking up sin tax. Prices of fruit and vegetables also increased handily, by nearly 8%. Prices of shoes and apparel fell by 6% as end of season sales kicked in. From the start of the year the CPI has risen by 2.1%. Calling the August CPI measurement "dramatically high," Yaniv Pagot, chief economist at the Ayalon investments group, blamed the increase mainly on tax hikes and the persisting increase in rental prices. He suspects the Bank of Israel will put off any more rate cuts to next year.
Early elections loom: Elections will almost certainly be brought forward to early 2013, February or March, because Prime Minister Benjamin Netanyahu can't cobble together coalition support for the budget, say Knesset sources. Talks were held ahead of the Rosh Hashanah break, but Yisrael Beiteinu and Shas held out, say the sources. Netanyahu himself has said he will only bring the budget proposal up for voting in Knesset if a majority can be assured. That may yet be possible: Yisrael Beiteinu chairman Avigdor Lieberman has shown he doesn't want early elections. As for Shas, though, its chairman Eli Yishai has stated clearly that the party opposes cuts to child allowances and income supplements, which are part of the budget proposal.
With reporting by Zvi Zrahiya, Oren Freund and Dror Raich.