Africa Israel offers plan to stave off possible debt bailout
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Africa Israel Investments said Monday its board would propose rearranging repayments on some 3.6 billion shekels ($926 million) of bonds, in a bid to avoid a second debt bailout in six years. The company, which has been hit hard by the recession in Russia, said it would offer holders of its Series Kaf Het, Kaf Vav and Kaf Zion bonds a payment schedule aimed at meeting their competing demands. Nervous about Africa Israel’s finances, Kaf Het bondholders are seeking to get paid early principal due them in 2018. However, Kaf Vav and Kaf Zion holders have threatened to go to court if that happens, arguing it would discriminate against their interests. Under the proposal, Africa Israel would move forward payments due the first two groups to March 1, pay Kaf Het holders money due them this year as well as 58 million shekels of the principal due them in 2018. Africa shares ended up 2.9% at 1.67 shekels.
Foreign investment bankers weighing role in sale of credit card issuers
Foreign investment banks are circling around the Israeli credit card companies controlled by Bank Leumi and Bank Hapoalim, in anticipation that the government will order the units be divested. Bankers have met with Hedva Ber, the Bank of Israel banks supervisor, to learn how the government envisions future regulation and who it would like to see as potential buyers before they begin approaching the banks themselves to offer their services. Last year’s interim government report recommended that Leumi be forced to sell its LeumiCard unit and Hapoalim its Isracard subsidiary within three years to create more competition in the consumer credit market. The two credit card issuers could fetch between 2 billion and 3.5 billion shekels ($514 million-$900 million), according to Excellence Brokerage. Obvious buyers would be Chinese companies with deep pockets, but the offer by China’s Fosun International to buy Phoenix insurance is meeting resistance from regulators.
Financial Supervision Authority should be in place in one year
The new and independent Financial Supervision Authority should be launched in about a year’s time, Deputy Finance Minister Yitzhak Cohen told reporters Monday. He said the proposal for the new body, which is designed to meet European Union and International Monetary Fund standards, would go to the cabinet for approval in the next several weeks and then move to the Knesset for a vote. The authority will operate under the treasury’s umbrella and its chief appointed by the finance minister, subject to cabinet approval, for a nonrenewable five-year term. Its goal will be to ensure the interests of savers, insurance policyholders, pension fund members as well as to ensure the financial stability of financial institutions and ensure competition. Current employees of the treasury’s Capital Markets, Insurance and Long-term Savings Division will move to the new authority, but staff will enjoy financial incentives aimed at attracting and retaining the best employees, Cohen said.
Tel Aviv shares gain, but less than world bourses
Tel Aviv shares ended higher Monday, although gains were more modest than in most of the world’s stock markets, which rallied as China’s central bank fixed the yuan at a much stronger rate and oil cemented recent gains, easing fears of global deflation. The TA-25 index ended up 0.7% at 1,407.27 points, while the TA-100, added 0.9% to 1,208.38. Volume was a thin 858 million shekels ($220.6 million). El Al Airlines led TA-100 stocks higher, jumping 9.2% to 2.73 shekels. Spacecom rose 8.6% to 34.07 shekels after reporting that it would be getting the full amount entitled under its insurance policy for the loss of its Amos 5 satellite. Bezeq advanced 1.9% to 8.39 shekels and Teva Pharmaceuticals 1.8% to 219.90. But oil and gas stocks slid after news that the High Court might demand that part of the gas framework agreement be subject to Knesset approval. Delek Drilling dropped 3.1% to 11.29 shekels, and Ratio lost 2.8% to 25 agorot.