Daily roundup / There's gas in them thar hills, sadly
Production is halted at the Meged-5 oil well when gas is spotted, while Shlomo Maoz turns shaky on his bid for a Likud seat and Ormat goes to Honduras.
Shlomo Maoz losing heart? The outspoken economist Shlomo Maoz may not contend in the Likud primaries after all, after grasping that his chances of gaining a seat on the party lineup for elections were slim. He's contending for the 23rd position in the list, meaning he'd only make it to Knesset if Likud gets at least 23 seats, but he's no shoo-in for that position. While his associates wouldn't comment, Stav Shaffir, social-activist-turned-Laborite, did have what to say: "Shlomo Maoz, Netanyahu's pet economist who scorns the social-justice protest and claims Israel's young are lazy and don't work hard enough, has proven now that if anybody's expecting a handout and is avoiding hard work, it's him."
Pumping halted at Meged oil well: Investors sent Givot Olam stock down 6% on Tuesday after signs of gas were detected at the Meged-5 well, by Rosh HaAyin. Production had to halt, Givot explained, though denying the problem is a "significant one, if there is any at all." Sensors at the site detected signs of gas of a type not observed before, the partnership elaborated; Environment Ministry inspectors hastened to the spot but couldn't find anything. Testing continues for the sake of caution, Givot said, and expects to resume pumping oil soon. To be sure, Meged-5 is no gusher: During the second quarter of 2012, Givot extracted 51,000 barrels of oil, which it sold for $5.7 million. The Meged-5 field is believed to have 2.4 million barrels all told. Israel's consumption averages 100 million barrels a year.
You may wind up financing Eliahu's Migdal takeover: Mere days after buying Migdal, the biggest insurance group in Israel, Shlomo Eliahu is leading the company to a giant debt offering. That debt would be taken up by the institutional investors that manage your savings. Market animals whisper that the firm will be tapping investors for as much as a billion shekels, which is a lot. More to the point, the animals suspect much of the proceeds will be used for a big dividend payout, which Eliahu could use to deleverage following his purchase of Migdal, in which Eliahu now owns 69.5%. At present Migdal owes bondholders NIS 0.5 billion and the banks about NIS 1.5 billion. For the first nine months of 2012 Migdal reported netting NIS 260 million.
Ilan Ben-Dov has revelation in court: Testifying in a derivative lawsuit pressed by shareholders against Partner Communications, its leaders and himself, company owner Ilan Ben-Dov acknowledged that a capital reduction for the sake of dividends may not have been the wisest course for the firm. "We had two options," he told the court: a capital reduction or selling shares. "With hindsight, the capital reduction was the less good option," he admitted. Ben-Dov bought Partner in 2009 for NIS 5.3 billion, for the sake of which he borrowed NIS 3.8 billion. He repaid the money by giant dividend withdrawals amounting to NIS 3.4 billion, which resulted in the derivative claim for NIS 1.25 billion. He personally is being sued to repay NIS 624 million to Partner. Asked specifically on the topic by Judge Chaled Kabub, he denied that the directors on the board had been his puppets.
Ormat buying Honduras project: Geothermal powerhouse Ormat Technologies is buying a project from Honduran company Geotermica Platanares. Specifically, Ormat is buying the rights to exploit a geothermal site, where the discovery wells have been completed. Israel-based Ormat will be selling the electricity produced at the site in the future to the Honduran power company ENEE. This is the first geothermal project in Honduras, which enacted a law to encourage the use of alternative energy in 2007.
Intel ditching Electric Corp: Intel Israel will no longer buy the copious power it needs from the Israel Electric Corp: The chipmaker, which has several facilities around Israel, will get its power needs from IC Power, a unit of the Ofer family's Israel Corp. The firm has reportedly signed a 10-year contract to that end.
With reporting by Nati Tucker, Nathan Sheva, Yasmin Gueta and Eran Azran