Business in Brief: Bondholders Rebel Against Sale of Alon Blue Square to Gindi Holdings

Psagot boosts profit despite volatile financial markets, Bezeq rallies after affirming 2015 profit forecasts and China nervousness sends shares lower.

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Alon Blue Square executives meeting with creditors, November 2, 2015.Credit: Moti Milrod

Bondholders rebel against sale of Alon Blue Square to Gindi Holdings

Alon Blue Square bondholders will meet amid a gathering rebellion against the sale of the holding company to Gindi Holdings. “The deal will never go through as it’s structured now,” said one institutional investor holding Series Gimel bonds, who asked not to be named Monday. Bondholders are seeking immediate repayment of the 380 million shekels ($96.1 million) the company owes them, rather than wait for five years as an agreement in principle reached last year calls for. The investors said the terms of the Alon Blue Square sale, which would give its controlling shareholders 115 million shekels for the company and free them from any legal claims over the collapse of the company’s Mega supermarket unit, were unfair since bondholders and bank creditors would have to wait five years to get their money. They held out the possibility of backing the deal if Gindi agreed to inject capital into Alon Blue Square, whose shares sank 6.3% to finish at 1.56 shekels. (Yoram Gabison)

Psagot boosts profit despite volatile financial markets

Psagot, Israel’s biggest financial services company, posted a 230-million-shekel ($58.2 million) pretax profit last year, a 12% increase over 2014 despite a volatile and poorly performing stock market. The company generated earnings before interest, taxes, depreciation and amortization of 390 million shekels, an 8% year-on-year increase, but revenues edged up just 1% to 940 million shekels. Despite the impressive financial performance, Psagot’s controlling shareholders – the British buyout fund Apax Partners – said it was not seeking an exit anytime soon and that it was considering any concrete offers. Apax valued Psagot at 2.7 billion shekels, which is only marginally more than the 2.5-billion-shekel valuation it acquired it for via two stages in 2010 and 2014. With the financial markets in a state of flux right now, it is unlikely, however, that Apax would be able to find a buyer willing to pay 2.7 billion shekels for Psagot.(Michael Rochvarger and Assa Sasson)

Bezeq rallies after affirming 2015 profit forecasts

Shares of Bezeq, Israel’s largest telecoms group, rallied Monday after it affirmed its estimate for 2015 net profit of 1.7 billion shekels ($430 million). The estimate includes a 115-million-shekel provision for a workers’ retirement plan that was not included in its previous forecast, as well as an assumption that it will reach an agreement with the tax authority regarding its investment in television subsidiary Yes. In November, Bezeq raised its 2015 profit estimate to 1.7 billion shekels from 1.5 billion. Bezeq earned 2.1 billion shekels in 2014. Most of Bezeq’s profit decline this year stems from cell-phone unit Pelephone, which has been hurt by competition. Bezeq also forecast 2015 earnings before interest, tax, depreciation and amortization of 4.25 billion shekels and free cash flow of 2.25 billion shekels. Bezeq shares ended up 2.7% at 8.80 shekels. (Reuters)

China nervousness sends shares lower

Tel Aviv shares turned lower Monday as disappointing economic news weighed on world stock markets. The benchmark TA-25 index ended down almost 0.4% at 1,470.56 points, while the TA-100 dropped 0.6% to 1,262.49, on turnover of 1.19 billion shekels ($301 million). Among the big losers, SodaStream finished down 4.1% at 52.50 shekels and Perion Network lost 5.1% to 9.35. First International Bank of Israel fell 4% to 45.19 shekels as Israel Discount Bank sold shares in FIBI at 44.70 shekels to institutional investors to meet a government deadline to reduce its 9.3% stake. Infrastructure & Real Estate Development Ltd tumbled 8% to 5.75 shekels after the Nigerian government said it was seeking loans to tide it over a financial crisis that could snag the building company’s extensive operations there. In the fixed income market, the government’s 10-year Shahar bond fell 0.31% to raise its yield to 1.93%. (Omri Zerachovitz)

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