Markets in Brief

Postal Company will repay its bondholders

In contrast to the letter it wrote to the Finance Ministry and leaked to the press, The Israel Postal Company can meet its bond payments. "Following press reports about the financial robustness of the company, the decision was made to convene a bondholders assembly in order to provide information on the company to all its bondholders regarding cash flow forecasts for 2012 and 2013," Israel Post advised the Tel Aviv Stock Exchange on Thursday. "The company will make its bond repayments (principal and interest ) in these years, in full," it wrote. A few days ago the picture seemed very different: Israel Postal Company chairman Sasi Shilo wrote to the Finance Ministry that the future of the company was "obscured by fog" and that its financial foundation was getting shakier and shakier. "Each day brings The Israel Postal Company closer to the void and greatly increases the cost of stabilizing it," he wrote. (Amitai Ziv )

Orckit bondholders spared haircut

Orckit Corrigent has spared its bondholders a haircut. It is true that the company is stretching repayment over more time, but they're getting their money back. Even so, news of the arrangement, announced on Thursday morning, sent its stock reeling: The dual-listed company closed trading in Tel Aviv down 27.3% for the day. More specifically, Orckit explains, the arrangement contemplates the deferral of the March 2012 early redemption right of the Series A note holders over 26 months, with aggregate payments of $9.8 million in May 2012, $2.6 million in September 2012, $1.4 million in March 2013 and $11.7 million (plus all accrued and unpaid interest ) in July 2014. So why did the stock tank? Because to induce the bondholders to convert the notes into shares, Orckit cut the conversion price of the Series A and Series B notes to below its current share price for a specific period, after which the price will be $2 per share. Also: The market price of Orckit stock at which it could force the conversion of the Series A and Series B notes will be $3.00 per share. At present Orckit can't force conversion of Series B notes: The market price at which it can force conversion of the Series A notes is $30.00 per share. (TheMarker )

Delek Real Estate B25 bondholders pull trigger

The holders of Delek Real Estate B25 bonds, owed NIS 600 million, have called in their loans, which means they are rejecting any arrangement and are pushing for the company's liquidation. Delek Real Estate's legal representative, Amir Bartov, demanded to see the documents that led the bondholders' trustee to state that 94% of the bondholders who voted in favor of calling in the loans are not in a state of conflicted interests. Bartov claims the majority was evidently achieved improperly. He claims that only bondholders who voted in favor of calling in the money immediately were counted; while bondholders who voted in favor of calling in the loans conditionally were not counted. But the trustee is refusing to hand over the documents, claiming the information is confidential and the bondholders did not empower him to disclose it. In any case there are no grounds for arrogant behavior by the company, the trustee Zvi Gissin wrote back. "Even though the company attests that it is bankrupt ... there is considerable doubt regarding that," Gissin wrote. "The company's attempt to meddle with the discretion of the trustee representing bondholders to whom Delek Real Estate owes NIS 600 million is not proper under any situation, when it is clear that the parties have categorically opposite positions." (Shelly Appelberg )

Tower net loss narrows to $19m in 2011

TowerJazz on Thursday reported improved results for 2011: Its net loss narrowed by 54% to $19 million, compared with $42 million in 2010. Also, when publishing its financial statement, Tower said it is positioning itself to build a state-of-the-art foundry in India: It has allied in a consortium with a "leading Indian infrastructure conglomerate" and a "worldwide leading technology provider," which it did not name. TowerJazz claims to have an "impeccable reputation in India based on a previous successful government project win and execution", but does note that it cannot promise anything. As for the company's results: Fourth-quarter revenues shot up to $174.6 million, compared with $135.1 million in the corresponding quarter of 2010. The figure was down $2 million from the previous quarter. Net loss for the quarter was $17 million, Tower said, but if nonrecurring items are excluded, the company earned $34 million. EBITDA for the fourth quarter of 2011 was $40 million, positive for six consecutive years, the company pointed out. Its cash balance at year-end was $101 million. As for the year, revenues were a record $611 million - an increase of 20% compared with the year before and double the figure for 2009. Net loss narrowed to $19 million or 6 cents per share, from a net loss of $42 million, or 18 cents per share in 2010 and net loss of $120 million, or 71 cents per share in 2009. (TheMarker )

Fattal Holdings gets A3 rating from Midroog

Midroog granted an A3 rating this week to Fattal Holdings, which is controlled by hotelier David Fattal. The rating is equivalent to S&P Maalot's A-minus rating. Usually companies commission a bond rating from the credit rating agencies ahead of issuing bonds. In this case it remains to be seen if Fattal Holdings, which is privately held, will go that route. The company might elect to borrow from the banks instead. Meanwhile David Fattal is working on raising money, about 150 million euros, from investors in Israel and overseas for a fund that would invest in European hotels. (Michael Rochvarger )