The Ticker: Israir Up for Sale Again After Abortive Merger With El Al Airlines

Jacob Frenkel not interested in returning to the Bank of Israel, associates say ■ After years of delay, Bezeq to begin wholesaling landline phone service ■ Delek Group to start drilling in Gulf of Mexico within the week

An Israir jet seen alongside an El Al jet at the Ben-Gurion International Airport.
\ Alon Ron

Israir up for sale again after abortive merger with El Al Airlines

A month after a planned merger with El Al Airlines was block by Israel’s Antitrust Authority, Israir will reportedly go back on the block again. Sources said over the weekend the Israir’s parent , the holding company IDB Development, is expected to retain the services of Giza Investment bank to find a buyer for the airline. IDB, which is controlled by Argentinian real estate entrepreneur Eduardo Elsztain, already hinted in its first-quarter financial report that it would try to sell the carrier, by listing it on its book as an asset likely to be sold in the next months. Israir’s situation, however, has deteriorated in recent months as jet fuel prices jumped 45%, competition from foreign airlines flying to Ben-Gurion International Airport has grown and pilots were awarded a 22% pay hike ahead of the abortive El Al merger. IDB may fetch a price of up to $75 million based on a valuation of enterprise value of five times EBITDA. (Yoram Gabison)

Jacob Frenkel not interested in returning to the Bank of Israel, associates say

Jacob Frenkel, who led the Bank of Israel from 1991 to 2000, isn’t interested in returning to the job, sources close to him said over the weekend. The sources said Frenkel, 75, prefers to remains at his job as chairman of the U.S. bank JPMorgan Chase International. His refusal would reportedly make Frenkel the third candidate to turn down then job after Northwestern University Prof. Martin Eichenbaum and Eugene Kandel, who had chaired the prime minister’s National Economic Council. Prime Minister Benjamin Netanyahu faces a November deadline to fill the governor’s post after Karnit Flug said she would not seek a second term. Frenkel was responsible for bringing down the inflation rate during his two-term tenure, but he was forced to withdraw his candidacy for a return stint in 2013 when a report surfaced that he had been detained in Hong Kong airport seven years earlier for alleged shoplifting from a duty free shop there. Sources close to Frankel denied that the shoplifting case had any relevance in his decision not to pursue the appointment, saying that all of the allegations were withdrawn and citing a document from the Hong Kong prosecutor from 2006 confirming that they had been dropped. (Meirav Arlosoroff)

After years of delay, Bezeq to begin wholesaling landline phone service

In a move that will cut sharply into its profits, Bezeq will this week begin offering competitors for its core telephony service use of its network on a wholesale basis. The decision comes after three years of delays during which Israel’s dominant telecoms company said its network wasn’t technically capable of providing wholesale services to rival despite a Communications Ministry directive ordering it to do so. It did follow through on wholesaling Internet services, however. Finally last month, the ministry said it would tolerate no further delays in the telephony segment and set a August 1 deadline for Bezeq to begin wholesaling its lines. Bezeq will now begin offering lines at the original (and now very low) wholesale rate set by the ministry in 2014. The landline telephone business is in declines, but the service accounted for 30% of the company’s 2017 revenues and an even greater share of its profits. (Nati Tucker)

Delek Group to start drilling in Gulf of Mexico within the week

Delek Group, the holding company controlled by Israel’s Yitzhak Tshuva, said on Sunday it would begin exploratory work at two prospects in the Gulf of Mexico. The company said it expected to begin drilling at the Canoe prospect at a depth of two kilometers within the week after receiving final approval from the U.S. Bureau of Ocean Energy Management. Operations will then move on to the Tau prospect starting two weeks later after it receives final clearance from regulators, which Delek said it expected to get next week. Delek expanded its energy operations from its home base in Israel and Britain’s North Sea when it reached an agreement in January with GulfSlope Energy and Texas South Energy to explore 12 Gulf concession. Delek agreed to cover 90% of the costs for the first two drill sites - up to $50 million - in exchange for 75% of the rights in those prospective drilling sites at the first stage. (Eran Azran)

TowerJazz, Teva and Partner weigh on Tel Aviv shares

Tel Aviv shares slumped on Sunday, weighed down by big drops for TowerJazz, Teva Pharmaceuticals and Partner Communications, The benchmark TA-35 index finished 0.2% lower at 1,573.07 points, while the TA-125, dropped 0.35% to 1,402.53, in light trading of 417.5 million shekels ($115 million). TowerJazz dropped another 2.1% to 74 shekels, after tumbling 10% on Thursday on a disappointing third-quarter outlook. Teva drooped 2.6% to 84.39 and Partner Communications 4% to 13.72. Insurance stocks were stronger, led by gains of 1.8% to 60.06 for Clal and 1.3% to 3.58 for Migdal. Delek Group lost 0.4% to 517.30. The holding company agreed in a settlement to pay 31 million shekels to shareholders of its former Delek Energy unit. Orbit rose 0.7% to 10.62. Its CEO, Eitan Livenh, said he was stepping down days after winning a 100 million shekel U.S. Army contract. In foreign currency trading on Friday, the dollar strengthened 0.8% to 3.6670 shekels. (TheMarker Staff)