Israel Chemicals Files Confidential Prospectus for U.S. Share Sale

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Israel Chemicals' Dead Sea Works potash plant in Sodom, October 2013.Credit: Reuters

Israel Chemicals has filed a so-called confidential, or secret, prospectus with the United States Securities and Exchange Commission ahead of a planned offering of shares in New York next month.

The shares, equal to a 5% stake in the company, will be sold by its parent company, Idan Ofer’s The Israel Corporation, for about 1.8 billion shekels ($503 million). Morgan Stanley and Goldman Sachs are managing the sale of the shares, which will trade on the New York Stock Exchange.

Filing a confidential IPO has been permitted since Congress passed the 2012 Jumpstart Our Business Startups (JOBS) Act for companies with less than $1 billion of annual sales or, as in the case of ICL, which is already trading on another bourse – the Tel Aviv Stock Exchange.

The secrecy only applies to draft versions of the prospectus, which enables companies that qualify to avoid disclosing information or withdraw the planned offering until they have tested investor interest and are formally ready to conduct the securities sale.

ICL had originally planned to list the shares in July as part of a strategy of increasing its exposure to global capital markets, and narrow the discount at which it traded to other leading world fertilizer makers. The listing was delayed until the conclusions of the government’s Sheshinski committee, which is examining royalties policy over Israel’s natural resources.

ICL mines minerals from the Dead Sea for its main product, potash.

Shares of ICL, which are down about 5.1% so far this year, closed 0.9% down at 27.78 shekels on the TASE Monday.

Led by its CEO Stephan Borgas, ICL plans an investor roadshow in London and New York at the start of September, with the goal of registering the stock for trading September 10 or 11. Under SEC rules, however, the company cannot begin the roadshow until its prospectus is released publicly, and the document is likely to be available to the public within a week to 10 days.

Another Israeli company that is taking advantage of the confidential prospectus option is Kitov Pharmaceuticals, a developer of non-steroidal anti-inflammatory drugs that treat pain without raising blood pressure, also traded on the TASE.

On Monday, the company filed a document with the SEC seeking to list its shares on the Nasdaq or NYSE without raising additional capital. Its Level II American depositary receipts, or ADRs, will enable it to trade in the U.S. without meeting U.S. financial-reporting requirements. The company, also seeking to increase its exposure to foreign investors, said it is aiming to register the ADRs by the fourth quarter

Kitov, whose shares jumped 8.9% to a close of 49 agorot on the TASE on the news, is developing drugs created from combinations of existing treatments that treat the pain of osteoarthritis without causing cardiovascular problems.

Its KIT-301, which combines Naproxen with anti-hypertension, is ready for phase III clinical trials. Phase II trials began in Northern Ireland in June for its KIT-302, which combines Celecoxib with anti-hypertension.

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