Business in Brief: Delek Drilling and Avner Close to Signing Loan for Leviathan Development

Knesset panel approves bill for restructuring stock exchange | Novolog meets strong demand in IPO | Tel Aviv shares decline for first time in four sessions

Eliran Avtial

Delek Drilling and Avner close to signing loan for Leviathan development

Development of the giant Leviathan natural gas field is close to becoming a fait accompli: TheMarker has learned that Delek Drilling and Avner Oil Exploration, the two Leviathan partners controlled by Delek Group, were expected to sign loan contracts last night with HSBC and JPMorgan Chase to borrow between $1.5 billion and $1.75 billion. The two companies, which control a combined 45.3% of the field, are taking the loans even though the U.S. operating partner Noble Energy said last week that it would formally announce its final investment decision sometime during the first quarter. The two are signing now because the commitment letters they signed two months ago with the lenders expired Monday. The financing Delek and Avner are lining up is for the first stage of Leviathan’s development, which is expected to cost as much as $4 billion. Delek Drilling shares ended up 0.6% at 31.11 shekels ($8.39) and Avner shares ahead 0.4% at 2.44. (Eran Azran)

Knesset panel approves bill for restructuring stock exchange

The Knesset Finance Committee Monday approved long-delayed legislation restructuring the Tel Aviv Stock Exchange into a limited liability company, a change its backers say will help revive the stock market. The law, which now goes to the full Knesset for its second and third readings before becoming law, demutualizes the TASE and separates membership from ownership in order to prevent conflicts of interest and create a more dynamic management. The stock exchange has seen 200 companies delist and the average daily trading volume drop to 1.27 billion shekels ($343 million) last year, from 2 billion shekels in 2010. That trend was underscored Monday when, during the committee’s deliberations, Wize Pharma said it will delist due to an impending merger with a Wall Street-listed company. Israeli banks will be barred from owning more than 35% of the demutualized bourse, down from 71%. (Shelly Appelberg)

Novolog meets strong demand in IPO

The Novolog pharmaceutical distribution company drew strong demand in the institutional tranche of its initial public offering Monday of a 49.9% stake. Investors subscribed to 820 million shekels ($221 million) of stock, 5.5 times the amount on offer. The shares sold at a 16% premium to the minimum price set in the prospectus. That values the company at 546 million shekels versus a minimum valuation set in the prospectus of 460 million. The company, which is owned by the FIMI private equity fund and Ehud Pozis, is only the second to join the Tel Aviv Stock Exchange, after Ratio Petroleum. Novolog serves as the logistical arm for major pharmaceutical companies such as Pfizer, Novartis, Sanofi and Roche. It had revenues of 560 million shekels in the first nine months of 2016. The offering is led by Leader Underwriters, with Barak Capital, Excellence and Value Base. (Yoram Gabison)

Tel Aviv shares decline for first time in four sessions

Tel Aviv shares fell for the first time in four sessions Monday, with Israel Chemicals weighing down the TA-35 index in light trading. The blue-chip index ended the day down 0.1% at 1,458.60 points, while the TA-125 ended virtually unchanged at 1,294.94, as just 842 million shekels ($227 million) in shares changed hands. Israel Chemicals dropped 2.5% to 1662 shekels. Its parent company the Israel Corporation lost 1.7% to 701.70. Other big losers were Delta Galil on a 1.5% loss to 108.50 and Migdal insurance on a 1.2% drop to 3.55. Telco stocks were mostly higher, led by a 3% advance for Partner Communications to 27,.60 and a 2.7% gain for Cellcom Israel to 40.23. Ratio Petroleum rose 3.6% to 282 in unusually heavy trading. In foreign currency trading, the dollar and euro lost heavily, with the greenback down almost 0.25% against the shekel to a Bank of Israel rate of 3.7070 and the euro 0.4% weaker at 3.9397. (Omri Zerachovitz)