The Ticker: Bank Leumi Sells Romanian Unit as It Focuses on the U.S., Britain

Teva reveals share, option holdings of directors, executives ■ Oil Refineries gets nod to develop $200 million gas-fired power plant ■ Adom Finance abandons pioneering issue of bonds to be invested in bank deposits ■ Tel Aviv shares end lower as dollar gains on intervention

Bank Leumi ATM machines, Tel Aviv, January 24, 2016
Ofer Vaknin

Bank Leumi sells Romanian unit as it focuses on the U.S., Britain

Bank Leumi said on Wednesday it had signed an agreement to sell its Romanian bank to Britain’s Argo Capital Management as it focuses its overseas operations on the United States and Britain. Leumi said it expected to get just over 100 million shekels ($29 million) for its Bank Leumi Romania SA, about 20 million less than the unit’s shareholders’ equity. The sale, which requires approvals from Israeli and Romanian authorities, won’t materially affect Leumi’s earnings, it said. Leumi Romania operates 15 branches as of the end of 2016, down from as many as 22, serving local clients and Israelis doing business in the country. It entered the Romanian market in 2006 buying Eurom Bank for $60 million in an era when the local economy was thriving and foreign investors were pouring money into the country. But in the end Leumi was saddled with losses as the local economy turned sour. Leumi shares ended down 0.4% at 21.47 shekels. (Michael Rochvarger)

Teva reveals share, option holdings of directors, executives

Amir Elstein, a member of Teva Pharmaceuticals’ board for the past eight years, has two million shares in the company valued at $38 million as of January 1, Teva reported late on Tuesday as it complied for the first time with U.S. disclosure rules revealing the share and stock options held by its top officers and directors. Teva shares have plunged 70% in the last two years to $18.85 in early New York trading on Wednesday, making a large part of the options held by board members worth little because the exercise prices is between $35 and $60 a share. The report shows that Kare Schultz received 594,000 stock options when he took over as CEO two months ago. They have an exercise price of $11.40 each that he can act on over the next two to four years. Schultz also got another 1.94 million shares that become unblocked over the next three to five years. (Omri Zerachovitz)

Oil Refineries gets nod to develop $200 million gas-fired power plant

In a milestone toward replacing its 34-year-old power plant, Oil Refineries Limited said on Wednesday it had received government approval to build a 135-megawatt natural gas-fueled station. ORL, Israel’s largest refining and petrochemicals group, said it plans eventually to expand the new station to 340 megawatts when the transmission infrastructure is upgraded. The company did not disclose financial details of the new co-generation plant, which will produce both steam and electricity to power ORL’s own operations, but Liran Lublin, an analyst at the investment house IBI, estimated it would cost about $200 million and would contribute cost savings some $24 million to ORL’s earnings before interest, taxes, depreciation and amortization. ORL’s existing coal-fired plant burns 500,000 metric tons of coal a year, said ORL, which last month signed a deal with Greek energy company Energean to buy gas from two offshore Israeli fields. ORL Shares of Oil Refineries finished down 0.3% at 1.66 shekels. (Eran Azran)

Adom Finance abandons pioneering issue of bonds to be invested in bank deposits 

Adom Finance’s 1.5 billion shekels ($430 million) bond issue failed on Tuesday after institutional investors said they would only accept a coupon on the bonds higher than the company was prepared to pay. Formed as a special purpose company, Adom had hoped to raise the money to put into bank deposits and collect the difference on the spread between the deposit rates and what bondholders received. But in the institutional tranche of the issue, investors would only take a rate about 80 basis points higher than the deposit rates Adom expected to collect, forcing the company to withdraw the issue. The issue would have enabled the banks to raise the money without publishing a prospectus while giving the public a tradable asset with the low risk of a deposit. Despite the issue’s failure, sources said more such issues were likely to be coming because of the advantages they give to banks and investors. (Michael Rochvarger) 

Tel Aviv shares end lower as dollar gains on intervention

Tel Aviv shares surrendered early gains to end lower on Wednesday, despite gains on Europe and on Wall Street, as the dollar gained amid reports the Bank of Israel intervened in the market. The benchmark TA-35 index fell 0.4% to end at 1,525.77 points, while the TA-125 shed 0.2% to 1,382.63, on turnover of 1.72 billion shekels ($500 million). Among the key losers, Frutarom ended down 2.4% at 314.40 shekels, Elbit Systems declined 1.4% to 465.30 and Nice Systems fell 1.5% to 316.50.  Biomed shares led sectorial gainers, with Mazor Robotics adding 5.8% to end at 93.18 and Compugen adding 4.8% to 9.57. TowerJazz advanced 2.2% to 121.60. Naphtha led declines on the TA-125, dropping 4.3% to 24.43. In foreign currency trading, the dollar stemmed a string of losses to edge 0.09% higher to a Bank of Israel rate of 3.46 shekels. The euro weakened 0.3% against the shekel to 4.1578. (Guy Erez)