Roundup / Deal done: Shlomo Ben Zvi buys Maariv
More downgrades at IDB, Miloumor chosen to for cemetery works, rumbles at Phoenicia.
Maariv sale is a go: On Thursday morning, as dawn broke over the sleeping people of Israel, publisher Shlomo Ben-Zvi signed the deal buying the reeling Maariv Holdings publishing operation from the IDB group. Late Wednesday night, after a day of clashes between Maariv workers and management, the Maariv board of directors approved the deal with Ben-Zvi, who also publishes the right-leaning paper Makor Rishon. Despite the takeover, mass dismissals still loom at Maariv, which has been operating deep in the red for years.
IDB Development Corp downgraded 4 notches: S&P Maalot on Wednesday downgraded bonds of two central IDB group companies, IDB Development Corp and Discount Investments. IDB Development was hit with a 4-notch downgrade to BB, from BBB+, and it's on negative credit watch to boot. Meaning, another downgrade is more likely than not. Maalot professes concern about the state of IDB Development's liquidity. The gap between IDB Development's sources and uses will be NIS 1.3 billion in 2014, Maalot predicts. Moreover, unless the company takes preventative measures, it could be in breach of financial covenants by late 2013, Maalot frets. Meanwhile, IDB Development Corp subsidiary Discount Investments suffered a 2-level downgrade to BBB, from A-minus, again because of liquidity issues.
Miloumor to build groundwork for new Tel Aviv cemetery: The Miloumor real estate group won the government tender to prepare the groundwork for a new cemetery serving the Tel Aviv metropolitan area, at a cost of about NIS 40 million. The cemetery is supposed to be a huge one, offering a final resting place for some 330,000 people. It will be built on a defunct quarry by the moshav Bareket. Miloumor is owned by Freddy Robinson, who is under investigation for alleged tax dodging.
Phoenicia fights to get hooked on gas: Workers of the struggling glass plant Phoenicia will be demonstrating on Thursday by the northern industrial zone of Alon Tavor, which has been connected to a gas pipeline. The choice of location is based on the fact that Phoenicia's plant has not been connected to the gas line. If it had been Phoenicia would not be in such dire financial distress, they argue: the company has to use expensive (and filthy) mazut fuel oil. The bottom line is that Phoenicia's prices can't compete in world markets, the company says. The workers are demanding that the government cover the cost of linking the plant to the gas pipeline, which is 25km away, a position supported by industry organizations. On Wednesday Carmel Shama-Hacohen, chairman of the Knesset Economic Affairs Committee, toured Phoenicia's plant and commented that the crisis seems resolvable: "Israeli governments have solved knottier and costlier problems," he said.
With reporting by Nati Tucker, Shuki Sadeh, Haim Bior, Dror Raich and Zvi Zrahiya