Israeli Leviathan Partners Approve Development Plan for Gas Field

Business in Brief | Elco Group companies in two merger and acquisition deals; Partner Communications sees higher costs after reaching agreement with unions; Tel Aviv shares post decline, paced by real estate shares.

Off Haifa coast, oil rig at enormous Leviathan natural gas field.

Israeli Leviathan partners approve development plan for gas field

Development of Leviathan moved a step closer on Monday as Delek Drilling, Avner and Ratio – the three Israeli partners in the offshore gas field – said they had approved a plan to get the field into production by the end of 2019. The group told the Tel Aviv Stock Exchange that the plan calls for production to reach about 12 billion cubic meters a year in the first stage, and for investment of between $3.5 billion and $4 billion. However, the final investment decision hinges on a go-ahead from Leviathan’s operating partner, Texas-based Noble Energy. The Israeli group last month signed commitment letters with the banks HSBC and JPMorgan Chase for up to $1.75 billion of financing for the A1 development stage of the project. Delek Drilling and Avner Oil, each with a 22.7% stake, closed down 1.1% to 14.83 shekels ($3.89) and down 1.3% to 2.78 shekels, respectively. Ratio lost 1.2% to end at 34 agorot. (Eran Azran)

Elco Group companies in two merger and acquisition deals

Elco Group companies said Monday they were involved in two major merger and acquisition deals. Electra Consumer Products reported it was in talks to sell the operations of two Ace do-it-yourself chains, as well as the retailer Office Depot, for 190 million shekels ($49.7 million). Electra Consumer didn’t identify the buyer, who will pay 145 million shekels outright and assume 45 million shekels of debt, but sources said it was the private equity fund Kedma Capital. Electra Consumer has been mainly selling off assets to focus on its air-conditioning and Shekem Electric businesses. Electra Consumer shares ended down 1.7% at 52.04 shekels. Meanwhile, sister company Electra said it had agreed to buy a 60% stake in Megason, a provider of security hardware, for 86 million shekels. Electra said it had also taken an option to buy out the rest of the company by 2021. Electra fell 1.2% to 550.10 shekels. (Shelly Appelberg and Eran Azran)

Partner Communications sees higher costs after reaching agreement with unions

Partner Communications, Israel’s second-largest mobile provider, said Monday it has signed a new collective labor agreement covering what it called the “economic” aspects of an accord it signed with employees last March. Partner said the agreement, which runs to the end of 2018 and covers 3,000 employees, would boost its costs by about 7 million shekels ($1.8 million) in 2017 on top of the 10 million shekels it had already committed to in the earlier pact. Those costs, it added, will climb to a combined 23 million shekels in 2018. In addition to a 6% pay raise for most employees, the company said the agreement also calls for employees to share in the company’s profits. In addition, Partner said it would also move to eliminate about 90 jobs, mainly through retirements, against which it will take an approximately 12-million-shekel charge in the current quarter. Shares of Partner finished up 0.4% at 19.31 shekels. (Janan Bsoul)

Tel Aviv shares post decline, paced by real estate shares

Tel Aviv shares ended lower Monday, with real estate shares pacing losses. The blue chip TA-25 index finished down 0.4% at 1,455.19 points, while the TA-100 shed 0.5% to 1,272.06, as 1.34 billion shekels ($350.6 million) in shares changed hands. Among the blue chip losers was Bezeq, which dropped 1.6% to 6.84 after unions declared a formal labor dispute at the company. Israel Chemicals was down 1.4% at 16.02, and El Al Airlines led TA-100 stocks lower on a decline of 4.9% to close at 2.66. Teva Pharmaceuticals led the most actives but fell just 0.5% to 139.30. Opko Health topped TA-100 gainers, advancing 3.5% to 43.35. Real estate shares were led lower by a 1.35% drop for Gazit Globe to 34.30 and a 2.05% decline for Norstar to 65. TAT Technologies rose 3.4% to 30.11 after it was reported that the FIMI private equity fund had increased its stake in the company to 60%, from 54%, in an off-the-floor trade at $7.50 a share. (Guy Erez)