El Al Drops Suit to Block Air India Flights to Israel via Saudi Airspace

Business in Brief | Super-Sol chairman ousted after angering top shareholder ■ TowerJazz shares tumble on weak outlook ■ Banks power TA-35 index to five-year high

File photo: An Air India Airbus A320neo plane.
\ Regis Duvignau/ REUTERS

Super-Sol chairman ousted after angering top shareholder

In a victory for Discount Investment Corporation and controlling shareholder Eduardo Elsztain, Super-Sol Chairman Israel Berman resigned Thursday. Berman acted after a majority of the food retailer’s nine-person board refused to back him, even though two key investors — hedge fund manager Sphera Funds Management and Altshuler Shaham Investment House — expressed opposition to Discount’s plan to fire him. Discount had sought to oust Berman after he sided with a plan by Super-Sol management to disband a board-level committee, with Discount representatives, that supervised the company’s day-to-day management. Disbanding the committee would deprive Discount of real-time information on Super-Sol’s business. Super-Sol acted on the advice of lawyers after Discount this month cut its stake in the company to 33% from a controlling 50.1%. Super-Sol shares ended down 1.5% at 21.82 shekels ($5.98). (Yoram Gabison)

El Al drops suit to block Air India flights 

El Al Airlines said Wednesday it had withdrawn its lawsuit seeking to restrict any new flights to the country via Saudi airspace until it could also use the shortened route. El Al said its decision followed a hearing in the High Court of Justice on the matter on July 18. The statement did not provide further details, but justices had urged the airline to drop the suit. Israel’s flag carrier filed the suit in March claiming unfair competition after Saudi Arabia opened its airspace for the first time to a commercial flight to Israel by Air India. Although the move signaled a thawing of ties between Israel and Saudi Arabia, Riyadh has shown no sign of allowing an Israeli carrier to use its airspace. Instead, El Al must take a more circuitous path to avoid Saudi Arabia, which it says adds two hours to flight times and increases costs. (Gabriela Davidovich-Weisberg and Efrat Neuman)

TowerJazz shares tumble on weak outlook

Shares of TowerJazz tumbled Thursday after the chip maker warned that third-quarter revenue would fall short of analysts’ expectations. The company said it expected third-quarter revenue to fall within a range of 5% above or below $335 million, versus average analysts’ expectations of $360.5 million, according to Thomson Reuters I/B/E/S. TowerJazz has seen “some pullback in the mobile market” in the past few weeks that was not forecast just a month ago, CEO Russell Ellwanger told Reuters. Looking to the fourth quarter, TowerJazz said it expected record revenue, lifted by an increase in its capacity to manufacture silicon germanium chips used in high-speed data transfer. It is targeting record fourth quarter revenue of up to $380 million, versus analysts’ estimates for $381 million. TowerJazz’s second quarter was in line with expectations, with diluted earnings per share excluding one-time items at 41 cents, down from 53 cents a year earlier. TowerJazz fell 10% to 75.60  shekels ($20.73). (Yoram Gabison)

Banks power TA-35 index to five-year high

The Tel Aviv Stock Exchange’s TA-35 index closed at its highest in nearly five years Thursday, led by gains for banking shares. The benchmark index climbed 0.5% to 1,577.70 points while the TA-125 rose 0.4% to 1,407.46, on heavy turnover of 1.75 billion shekels ($481 million). Banking stocks were paced by of 1.7% to 71.75 shekels by Mizrahi Tefahot and 1.5% to 22.95 for Bank Leumi. Gazit Globe advanced 1.5% to 33.36 after announcing it had completed the sale of the last of its shares in the U.S. property company Regency Centers for $347 million. Kamada gained 0.4% to 20.76 even though it reported that workers at its plant had declared a strike this week. Top gainers on the TA-125 were Sapiens, which rose 3.4% to 28.16, and Harel, up 3.2% to 28.30. On the losing side, El Al Airlines dropped 3.4% to 88 agorot and Gilat Satellites 23.7% to 30.06 shekels. (Jasmin Gueta)