Discount Bank Expands Layoffs by 130 Staff

The Ticker: Kardan in pact with bondholders, Shareholders reject U. Dori bid to delist.

Ofer Vaknin

Kardan in pact with bondholders

Kardan NV, the property developer, yesterday reached a debt-bailout program with representatives of investors holding 345 million euros ($424 million) of its bonds. The accord enables Kardan to delay 161 million shekels of principal payments by two years to February 2017 and delay another 15 million shekels of interest payments by six months to August, giving the company time to divest assets and raise cash. In exchange, bondholders will get high rates of interest ranging from 1.875% to 2.3765%. They will also get a 12% stake in the company while all the shares in its China unit, GTC RE and other subsidiaries will be assigned as collateral against Kardan’s debt. Bondholders will vote on the agreement next week. Kardan ended 1% higher at 1.02 shekels. (Yoram Gabison)

Discount Bank expands layoffs by 130 staff

In a surprise move, Israel Discount Bank said yesterday it was expanding its layoffs program to about another 130 employees and would take a 110-million-shekel ($27.9 million) charge in the fourth quarter to cover the costs. The move comes on top of the 250 dismissals the bank, Israel’s third-largest lender, announced two months ago it was making at a cost of 300 million shekels. The response to the offer to buy employees aged 55 to 60 out of their contracts got a faster response than management had expected so that by the end of the year some 380 employees will have left as the bank tries to boost the profitability. Discount rose 1.5% to a close of 6.31 shekels. (Michael Rochvarger)

Shareholders reject U. Dori bid to delist

U. Dori Construction, the financially troubled builder controlled by Gazit Globe, said yesterday that it failed to convince enough shareholders to accept its offer to buy them out and delist its stock from the Tel Aviv Stock Exchange. The 17.5-million-shekel ($4.4 million) offer to buy the shares at 1.25 shekels each, a premium of just 3.3% over the market price when it was made, won backing from just 40% of all public shareholders. Sources said shareholders rejected the offer in anticipation an improved one later one. Shares of Dori, which discovered in July it had run up unreported losses reaching 450 million shekels in 2013 and 2014, finished 0.2% up at 1.25 shekels. (Eran Azran)

Tel Aviv rallies on Fed go-slow policy plans

Tel Aviv shares rallied yesterday, cheered by news the U.S. Federal Reserve would take its time raising interest rates. The benchmark TA-25 index closed 0.9% higher at 1,481.88 points while the broader TA-100 index pushed 1.2% higher to a 1,311.06 finish. Turnover was a brisk 1.92 billion shekels ($490 million). Drug shares were up sharply, with Teva Pharmaceuticals ending 2.4% higher at 221.90, Perrigo ahead 4.8% at 639 and Opko Health 5.7% higher at 36.30. But shares exposed to Russia’s financial woes tumbled: Strauss Group lost 2.7% to end at 61.33 and Jerusalem Economy was down by 5.8% to 16.13. Corporate bonds rallied for a second day with the Tel-Bond 20, 40 and 60 indices up to 1%. (Eran Azran)