Eliezer Fishman's debacle with the Turkish lira is worrying both the banking system and the Bank of Israel. The numbers are even bigger than had been previously estimated: the real estate baron's losses on the lira total NIS 1.4 billion, and according to estimates could even reach NIS 2 billion. Fishman's spokesman refused to comment on the figures and meanwhile, the central bank is examining the potential ramifications of his embarrassment.
Following his vast losses, the banks are making efforts to minimize their own potential losses by demanding more collateral. They are also closing open positions of companies Fishman owns.
One of the big banks is reportedly considering allowing Fishman to reschedule payment of losses over a year.
Fishman may have to sell his holdings in assets such as VisaCal and the Ten fuel company, which though not popularly known is the fifth-biggest fuel company in Israel, with 30 gas stations. TheMarker has learned that on Thursday night Fishman met with billionaire Yitzhak Tshuva to discuss possible deals for VisaCal and Ten.
Ten is considered to be a fierce source of competition, since its prices are on average 15% lower than those of nearby stations.
The value discussed for VisaCal is around NIS 1.5 billion, so that if the deal is closed Fishman will get a cash injection of NIS 360 million for his 24% stake in the company.
Stock market sources said that Tshuva always intended to help Fishman get out of trouble by buying VisaCal, and to sell it afterward. However, it seems that after a few days of talks, Tshuva has "fallen in love" with the company. A spokesman for Tshuva's company Delek refused to comment.
Fishman owns 100% of Ten and could close a deal on the spot. The price under discussion is around $60 million for the company.
Fishman operates on the currency markets via several of the companies that he owns. Banking sources said that he "doesn't leave any line empty", meaning that he takes advantage of every credit line that he has at his disposal to invest in currencies in which he has faith.
The Bank of Israel is also investigating the details and implications of Fishman's entanglement. The banks use risk management models that are supposed to provide answers in extreme cases. However, the collapse of the Turkish lira by 19% in a few days is an exceptional event by any standards.
"It's like the way they said that the Ayalon river would burst its banks once every 50 years, and it happened twice inside a month," said a senior banking source yesterday. Israelis had amused themselves by kayaking down the highway back then, but there is nothing amusing in the present debacle.
The questions raised by the affair are why the banks did not provide themselves with enough collateral and found themselves in a situation where they were under pressure to obtain it, why the potential loss was not was not limited in advance, and how it happened that such a large client risked and lost most of his capital in a gamble that soured.
In recent days Fishman has met with managers of the large banks to work out an arrangement and to provide the banks with collateral. According to estimates, Fishman transferred cash to Discount Bank to cover his losses there.
Recently Fishman has been meeting with the managers of the big banks to discuss his sorry situation. The whisper is that he gave Bank Discount enough cash to cover his loss. Sources at Bank Hapoalim commented that it has enoug collateral from him to cover exposure.
Rumors are circulating that two other businessmen have also lost hundreds of millions of shekels on the Turkish lira, but this has been denied.
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