Koor Gradually Exiting Credit Suisse

Sells 5.5 million shares of the Swiss bank, still holds 1.6% stake.

Koor Industries, which is part of Nochi Dankner’s IDB Group, has begun selling off its 1.95% stake in Credit Suisse. The stake in Koor, run by Raanan Cohen and Lior Hannes, is being sold off by the decision of the company’s board of directors.

Koor reported Monday evening that over the past few days, it had sold 5.5 million shares in Credit Suisse for approximately 155 million Swiss francs (roughly NIS 597 million), and that the sale would allow it to list a profit of about NIS 73 million in its financial reports for the third quarter of 2013.

Of the amount it received in the sale, Koor made a partial repayment of about 62 million Swiss francs to Morgan Stanley and to Citigroup, which financed Koor’s purchase of the stake in Credit Suisse.

The rest of the debt that Koor owes both banks is roughly 280 million Swiss francs (about NIS 1.08 billion). About 24.82 million of its shares in Credit Suisse are attached as collateral for the sum.

Koor retains a stake of 25.56 million shares in Credit Suisse (roughly 1.6 percent). The shares’ market value is 733 million Swiss francs — roughly NIS 380 million more than their market value as listed in Koor’s ledgers. Koor notes in its report that it plans to sell off the rest of its stake in Credit Suisse as part of the completion of its merger into its parent company, Discount Investment Corporation.

On Tuesday, officials of Entropy Consultants, a prominent Israeli risk-management consulting firm, recommended to the shareholders of Koor and Discount Investment that they vote in favor of the merger of Koor and Discount Investment. Earlier this week, Koor’s bondholders approved an early bond redemption that had been proposed by Koor officials.

IDB’s stake in Credit Suisse was one of its biggest gambles over the past few years. In the first round, which began in 2008, the investment brought in a profit of about NIS 3 billion, but losses in similar amounts followed later on.

Ofer Vaknin