Gambling on the Turkish Lira Cost Fishman Hundreds of Millions of Shekels

The real estate and media baron is negotiating to sell hs 24% VisaCal stake to Yitzhak Tshuva to cover his losses

Gambling on the Turkish lira has cost real estate and media baron Eliezer Fishman hundreds of millions of shekels.

His massive losses have compelled Fishman to negotiate selling his 24% stake in credit card company VisaCal to Yitzhak Tshuva's Delek Group (TASE: <a target="_blank" href="">DLEKG</a>). The deal would reportedly value VisaCal at NIS 1.5 billion.

The controlling shareholder of VisaCal, Discount Bank, has first refusal on Fishman's stake. If Fishman does offer VisaCal to Delek, Discount can demand to buy it.

The Turkish lira has weakened by 16% in last two weeks. Because of the huge leverage involved in deals of this kind, a loss of 16% represents a huge amount of money.

The banks have asked Fishman for extra collateral against the losses, and he provided it through attachment of shares of some companies that he owns. Stock market sources estimated yesterday that Fishman's losses are the reason behind the putative sale of his stake in VisaCal to Tshuva.

Yesterday evening a PR company Fishman hired released the following statement: "Businessman Eliezer Fishman suffered losses as part of his foreign currency activities. Fishman provided the banks with all the requested collateral. It should be emphasized that the loss is significantly smaller than the total value of the assets in Fishman's possession. The other public companies owned by Fishman are not involved in the deal."

His companies reveal their losses

Yesterday, at around the time that the report appeared on the TheMarker website, companies owned by Fishman began to report their losses from the deals to the stock market.

Tire manufacturer Alliance reported a loss of NIS 9.5 million on foreign currency deals.

From its reports, it turns out that Alliance was involved in a deal worth $53 million, valid until September 2006. Alliance reported that at current currency rates, the deal led to a loss of $6.2 million. In addition, the company reported a further loss of $3.3 million on deals made from the end of the quarter until now.

The exact extent of Fishman's losses is unknown, but it is known to be hundreds of millions of shekels, mostly via private companies that he owns.

Fishman invests in foreign currency through several banks, including Discount, Hapoalim, Union Bank and Leumi.

It is known that Fishman's greatest exposure to the Turkish lira is via Bank Hapoalim, amounting to many tens of millions of dollars. Discount Bank is also exposed to the tune of $20-30 million, since it is considered to be one of the leaders in providing currency trading services.

Currency market sources estimated that some banks would be forced to publish statements to the stock market to report this event, which is considered significant.

It has also been reported that some banks have held board meetings in the last two days to discuss Fishman's losses.