TechNation: Fiber-optic Operator in Search of Funds

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The Netafim drip-irrigation company, on Kibbutz Magal, in 2012.
Netafim. The company will be selling drip-irrigation equipment thanks to a collaborative venture between the Paraguayan Federation of Production Cooperatives and Israel.Credit: Eyal Toueg

IBC needs up to $390m from new investors

IBC, the troubled operator of a nationwide fiber-optic network, believes it needs as much as 1.5 billion shekels ($390 million) to roll out its network and recruit subscribers, nearly double its original budget, TheMarker has learned. The bigger estimate comes two weeks before potential investors in IBC, which is now 40%-owned by Israel Electric Corporation, get their first chance to see the company’s financial and other information before making bids. The final amount of the investment program will depend on what the new player is prepared to spend, but the Communications Ministry earlier this month reversed itself and said cellular companies could bid, which should bring in potential investors with deep enough pockets to cover the cost. In fact, bidding terms would allow the cellular operators Cellcom Israel and partner Communications to come in as joint investors. IBC has laid 3,000 kilometers of cable capable of reaching 30,000 homes, but has signed up just 3,000 subscribers. (Amitai Ziv)

Government plans to streamline M&A tax treatment

The treasury and Israel Tax Authority plan over the next few weeks to propose rules that would offer better tax treatment and less strict regulations for mergers and acquisitions in the high-tech sector. The new rules are part of a policy of encouraging Israeli companies to grow through M&A and remain independent. Among the rules that will be amended is one that bars companies from altering their share structure immediately after an acquisition, which effectively prevents them from making acquisitions more than once every 2-3 years. Another would not treat acquisitions as a tax event so long as they are at least 60% in shares, rather than cash; another would create a fast-track process that would exempt companies from special approval from the tax authority for M&A deals. “These changes have been put off for years and may act to energize the high-tech industry,” Finance Minister Moshe Kahlon said. (Eliran Rubin)

Colu raises $9.6m for localized digital currency

Colu, an Israeli startup that uses blockchain technology to develop localized digital money, announced that it has raised $9.6 million from an unnamed strategic investor, along with venture capital investors Aleph, Spark Capital and Digital Currency Group, and former Thomson Reuters CEO Tom Glocer. Founded in 2015, the startup’s technology enables local businesses to create their own currency without the need for a financial intermediary such as a bank or credit card company. Colu uses “colored coins,” which use bitcoin functionality for real-world assets that have addresses on the bitcoin network, such as a deed for a house, stocks or bonds. “There are a lot of other use cases for colored coins, in music, in the Internet of Things, but what we saw after a while was that more than 60% of the use cases were for local currencies. This is where our market is,” CEO Amos Meiri told the digital currency website CoinDesk. The current round, which brings the amount raised by the company to over $12 million, will be used to expand its 22-person staff and begin deploying its technology outsides its home base in Tel Aviv to places like Barbados and Brazil. (Eliran Rubin)

Small Paraguayan farms using Israeli drip-irrigation

Small farms in Paraguay are using Israeli drip irrigation technology to save water as a climate change-driven drought savages parts of the country and much of South America. The Israeli company Netafim will be supplying the equipment thanks to a collaborative venture between the Paraguayan Federation of Production Cooperatives and Israel, to be announced on Wednesday, according to La Nacion newspaper. The technology involves literally dripping water, complete with carefully calculated fertilizer enhancements, directly onto the roots of plants. The common alternative is irrigation by flooding. Drip is a boon to farmers, who can save on water and fertilizer costs, achieving larger crops per acre, although some experts worry that it does not allow water return to underground aquifers. Installation and maintenance will be deployed by a local company, Agroganadera Pirapey. (JTA)

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