Business in Brief: Energean Slates London IPO to Fund Israeli Gas Field Development

Israel Chemicals eyes move into digital agriculture through M&A deals ■ Stock exchange confident IBI can manage with loss on VIX gamble ■ Energy stocks power an otherwise lackluster TASE higher

Energean drilling vessel, 2016.
Energean

Energean slates London IPO in March to fund Israeli gas field development

Energean, the Greek energy company developing Israel’s Karish and Tanin gas fields, said Monday it was planning an initial public offering ahead of a premium listing on the London Stock Exchange next month. Energean hopes to raise $500 million to develop the two fields it bought a year ago from Israel’s Delek Group, the company said, adding that it was considering dual-listing its shares on the Tel Aviv Stock Exchange. Energean’s shareholders are two Greek families with a 55% stake in the company and U.S. hedge fund Third Point, which holds the rest. CEO Mathios Rigas said the IPO proceeds would be used for growth, rather than to pay existing shareholders. The company estimates it will cost $1.6 billion to put the two fields into production and recently arranged a $1.25 billion loan to help finance it. Citigroup and Morgan Stanley are leading the offering, joined by RBC and Stifel. In Israel, Poalim IBI is managing the sale. (Eran Azran)

Israel Chemicals eyes move into digital agriculture through M&A deals

Israel Chemicals plans to follow bigger agrochemical rivals like Bayer and Monsanto into services and data through acquisitions in digital farming. Even though ICl has managed to reduce its debt, continued low fertilizer prices coupled with a handful of expensive major infrastructure projects will limit ICL’s ability to finance big acquisitions. But under its new CEO,  Raviv Zoller, it plans to use smaller mergers and acquisitions and strategic cooperation agreements to become more than a fertilizer supplier. The strategy comes as growers increasingly rely on big data and other technology to make better use of inputs like water and pesticides. Monsanto, the U.S. company, spent $930 million five years ago to buy The Climate Corporation, which underwrites weather insurance for farmers, in order to sell more data and services to the farmers who already buy Monsanto’s seeds and chemicals. (Yoram Gabison) 

Stock exchange confident IBI can manage with loss on VIX gamble

The Tel Aviv Stock Exchange said it was confident that IBI Investment House is not in any financial danger after its clients took big losses shorting the CBOE Volatility Index two weeks ago during the global market crisis. “The exchange is in continuous contact with bourse member IBI, which has taken steps to ensure it meets capital and liquidity requirements. There is no concern about its [financial] stability,” the TASE said in a statement Sunday. IBI enabled several clients to short VIX, popularly known as the fear index because it serves as a barometer for market crashes. The investors lost so much IBI was forced to make a margin calls on their leveraged accounts. But the losses initially fall on the broker, which in IBI’s case amounted to $12.5 million, or about 22% of its shareholders’ equity. Other investment houses also lost on VIX, including the mutual fund units of Psagot and Epsilon. (Assa Sasson)

Energy stocks power an otherwise lackluster TASE higher

Tel Aviv shares rose Monday as energy stocks carried an otherwise lackluster market higher. The Oil and Gas index jumped 18.6% to 978.66 points on surprise news of an agreement to export natural gas to Egypt (see story on this page). That lifted the TA-35 index more than 0.6% to 1,508.10 and the TA-125 more than 0.7% to 1,373.20. But turnover was a relatively low 1.12 billion shekels ($320 million). Technology shares ended mostly lower, led by a 2.8% decline in Formula Systems to 123.50 shekels and a 2% drop by Mazor Robotics to 105.70. Other losers included Kenon Holdings, down 1.9% to 103.50, and Teva Pharmaceuticals, down 1.45% to 72. Leading gainers outside the energy sector included Mizrahi Tefahot Bank, with a 2.4% rise to 64.10, and Azrieli Group, with a 2.5% gain to 167.70.  In foreign currency trading, the euro weakened 1.3% to a representative rate of 4.371 shekels while the dollar lost 0.4% to 3.521. (Guy Erez)