Dollar Extends Gains on Shekel as Euro Weakens / The Ticker

Mirland nearing bailout pact with bondholders; Tower to convert bonds to shares; Spuntech to invest more in U.S. plant to widen product line; Shares pull back after hitting record high.

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Dollar extends gains on shekel as euro weakens

After breaking thought the 4-shekel barrier a day earlier, the dollar continued its ascent Tuesday, adding another 0.6% to its value to a Bank of Israel rate of 4.041. The euro, meanwhile, extended its losses, weakening 0.65% to 4.341 shekels. Economists attribute the two trends to strong jobs data from the U.S. released last week, which points to rising interest rates ahead, while in Europe the central bank launched a quantitative easing program on Monday. “If the shekel continues to weaken against the euro, we can’t rule out the possibility that the Bank of Israel won’t take new steps to stop it,” said Yaniv Hevron, chief economist at Excellence Investment House. Last month’s surprise rate cut, he said, showed that the Bank of Israel is determined to prevent the shekel from weakening against the basket of currencies. Currency trader FXCM said it expected the dollar to remain above 4 shekels for all of 2015. (Omri Zerachovitz)

Mirland nearing bailout pact with bondholders

Mirland, the Russian property-investment company controlled by Eliezer Fishman, has been quietly conducting talks with bondholders to reschedule payments on about 1 billion shekels ($250 million) in debt, TheMarker has learned. Talks have been progressing more quickly in the last few days, but the two sides remain divided on several issues. One is over the status of some 40 million shekels in Mirland bonds held by Fishman and companies he controls; the second is terms for converting some of the bondholders’ debt into Mirland shares and warrants. Mirland, which Fishman controls through publicly traded Jerusalem Economy, Industrial Buildings Limited and Darban, ran into trouble as the ruble collapsed last year and the Russian economy began slowing. The sharp hike in Russian interest rates has added to the company’s woes. (Michael Rochvarger)

Tower to accelerate convertible bonds conversion to shares

Chipmaker TowerJazz said on Tuesday it would offer an accelerated conversion of some of its convertible bonds to equity. The offering targets $40 million of about $120 million in outstanding bonds in a series issued in 2010 and 2012, TowerJazz said in a statement. “The effect is that debt will be reduced and shareholders’ equity will be increased,” a company executive told Reuters. “Based on the current market conditions, we expect that we will have over-subscription for this transaction.” The number of ordinary shares will jump to 69 million from 65 million with the transaction and net profit will be improved by $4 million a quarter, helping the company reach profitability, the executive said. TowerJazz shares ended down 2.2% at 66.80 shekels ($16.58). (Reuters)

Spuntech to invest more in U.S. plant to widen product line

NR Spuntech, a maker of non-woven fabrics used for disposable diapers and medical purposes, said Tuesday it would expand its North Carolina factory more than originally planned as it widens its product line with premium products that are more profitable. The company said it would spend $65 million on a new production line, up from an originally projected $45 million to $50 million, to give it a capacity of 22,000 tons annually, or 70% more than it has now. Spuntech said the added capacity could increase revenues by about 80% to 400 million shekels ($99.3 million) a year when it is completed by the third quarter. The U.S. company Procter & Gamble has emerged as a major customer for Spuntech, with trade reaching 119 million shekels last year, a 61% increase over 2013, and will grow further with a new, $70 million order from the company, Spuntech said. Spuntech shares rose 8.1% to close at 11.06 shekels. (Yoram Gabison)

Shares pull back after hitting record high

Renewed worries about Greece’s financial state and weaker banking stocks on Tuesday pushed Tel Aviv shares off the record high they posted the day before. The benchmark TA-25 index ended down 0.25% at 15.46.27 points, while the TA-100 lost 0.3% to 1,364.93, as 1.54 billion shekels ($380 million) in shares changed hands. Bank shares led the decline as Hapoalim and Mizrahi Tefahot both reported lower profit for the fourth quarter on Tuesday (see story on this page). Bank Leumi dropped 2.6% to finish at 13.78 shekels. But Mivtah Shamir soared 8% to 102.40 shekels on news that Bright Food had won final approvals to buy Tnuva from the holding company and Apax Partners. Africa Properties advanced 5.3% to close at 60.50 after it said it would pay 320 million shekels in dividends over the next two years after turning in a 79% increase in 2014 profit. (Omri Zerachovitz)