Business in Brief: Israel Chemicals Abandons Troubled Ethiopian Potash Mine

Yelin Lapidot to lend to U.S. property developers; 11.3 billion shekels security net set for veteran pension funds; Shares end down despite rally in Teva, insurance stocks.

Israel Chemicals abandons troubled Ethiopian potash mine

Israel Chemicals said Thursday its board had decided to abandon its troubled Allana Afar potash venture in Ethiopia. ICL, a unit of The Israel Corporation, cited the Ethiopian government’s “failure to provide the necessary infrastructures and regulatory framework.” It also blamed the Ethiopian tax authority’s “rejection of Allana Afar’s appeal regarding the unjustified and illegal tax assessment, which Allana Afar has declined to pay.” The mine was meant to provide an alternative source of potash in case the company failed to get its Dead Sea license renewed after 2030, and a hedge against what it sees as an uncertain business and regulatory environment in Israel. ICL said the net book value of its investment in the project as of June 30 was $170 million, which it would book as an impairment and also book a provision for expected closing costs. ICL shares ended up 0.9% at 14.41 shekels ($3.80). (Reuters)

Yelin Lapidot to lend to U.S. property developers

The Yelin Lapidot Investment House said this week it would be investing in the U.S. property market through a tie-up with American property financer Downtown. The turn to U.S. real estate markets is a major strategic development for Yelin Lapidot, which manages some 60 billion shekels ($15.8 billion) in assets and has focused until now almost entirely on the Israeli capital market. The firm said it would use money from the provident funds it manages as loans to U.S. developers, apparently as a means to boost equity capital. Israeli institutional investors have been stepping up their exposure to U.S. property by buying bonds issued American companies and investing in projects. But Yelin Lapidot believes that making loans directly to companies will pay better returns and offer better security. On the other hand, as the collateral for the loans is typically on one particular asset rather than a collection, the risk is higher. (Eran Azran)

11.3 billion shekels security net set for veteran pension funds

The Knesset’s Labor and Welfare Committee approved plans Thursday to provide an 11.3 billion-shekel ($3billion) security net for Israel’s veteran pension funds. The net, which will cover up to 11.8% of actuarial deficits, is aimed at protecting members from losses to payouts they are entitled to amid record low interest rates. Once controlled by the Histadrut labor federation, the eight funds were nationalized and bailed out to the tune of 78 billion shekels in 2003. The panel also approved plans to offer 10 other veteran funds that were not part of the 2003 bailout 2.5 billion shekels in exchange for their signing on to the same terms as the other eight, which include a higher pensionable age and management fees of 1,75% annually. These 10 funds must make a decision by the end of 2017. The government-sponsored legislation is based on recommendations of the Barnea committee. (Zvi Zrahiya)

Shares end down despite rally in Teva, insurance stocks

Tel Aviv shares finished lower Thursday despite rally by Teva Pharamceuticals and insurance stocks The blue chip TA-25 index lost almost 0.4% ending at 1,435.24 points, while the TA-100 was down 0.3% to 1,257.18, on a turnover of 1.33 billion shekels ($350 million). Teva finished the day ahead at 172.80 shekels, a gain of 1.35% and breaking a five-day losing streak that saw its price drop more than 11%. Insurance gains were led by Clal’s 2.4% advance to 41.67. Kamada jumped 5.6% to 20.52 after it said Shire was extending the companies’ strategic partnership for the Glassia drug and forecast minimum revenue for 2017 to 2020 of at least $237 million. Spuntech rose 4.3% to 13.25 to lead TA-100 stocks higher after its board approved Shlomo Liran as its new CEO. Mazor Robotics led TA-100 losers, falling 4.9% to 43.40. Opko Health declined 3.1% to 39.84 and Mylan lost 2.8% to end at 140.70. (Omri Zerachovitz)