Business in Brief: Dan Bus Company to Sell 35% Stake in Private Placement

Paz Oil building power plant ■ Stocks fall as Israel Chemicals tumbles

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A Dan bus in Tel Aviv, August 10, 2017.
A Dan bus in Tel Aviv, August 10, 2017.Credit: Ofer Vaknin

Dan, which operates buses in the greater Tel Aviv area, is meeting with institutional investors ahead of a planned sale of a 35% stake for 450 million shekels ($124 million). Founded as a cooperative in the 1940s, it is now a limited liability company 10% owned by Pinchas Rotenberg and 90% by 1,078 employees. In addition to operating a fleet of 2,000 buses that account for 25% of Israel’s public-transportation rides – an average of 700,000 passengers a day – Dan has been developing real estate on land it was allotted in the past for bus terminals. It also owns the Soreq desalination plant, the world’s largest. In 2017, Dan posted a 73-million-shekel profit on turnover of 1.9 billion shekels. Proceeds from the share sale will go in part to pay severance costs for 250 to 400 workers being let go to cut costs. The company is also weighing a public offering in another three or four years. (Yoram Gabison)

Paz approves plans to build power plant
Paz Oil said Wednesday its board authorized a plan to build a power plant to supply 700 megawatts of electricity for Israel’s national grid as part of a new strategy to enter the electricity business. Located in Ashdod, the gas-fired plant will be the company’s third and go online in 2023. It could cost up to $700 million, to be financed internally and through a debt offering. Paz said it may recruit partners. The board also authorized management to consider making bids for five power plants to be sold off by the state-owned Israel Electric Corporation in the coming eight years. The first on the block is the 600-megawatt Alon Tavor plant in a sale expected to be completed by the end of the year. “The company will examine the possibility of submitting a bid in the tender in accordance with the conditions, to be published later on,” Paz said. Paz shares ended 1% higher at 563.20 shekels ($155.57). (Reuters and Yoram Gabison)

Stocks lose momentum in final hours and end lower
Tel Aviv shares fell Wednesday as declines sharpened in the final two hours of the session. The benchmark TA-35 index lost 0.55% to end at 1,533.64 points, while the TA-125 dropped 0.5% to 1.414.91, on turnover topping 1.1 billion shekels ($300 million). Volume leader Israel Chemicals finished down 2.5% at 20.63 shekels after it reported that adjusted net profit fell to $124 million in the fourth quarter from $135 million a year earlier. Energy company Ratio fell 2.5% to 2.96 on news that geologist Eitan Eisenberg had sold his remaining 325,000 shares in the company over the past two days. BioTime fell for a fifth straight session, dropping 3.65% to 4.41. On the TA-125, TowerJazz climbed 4.2% to 55.77. Silverstein Properties raised 180 million shekels on Wednesday in a sale of bonds. It was the first U.S. property developer to sell debt since the crisis in the sector erupted four months ago. (Jenya Volinsky)