Benny Steinmetz Maneuvering to Buy a Local Investment Firm

Diamond and mining magnate Benny Steinmetz is ramping up his involvement in Israel's capital market.

Diamond and mining magnate Beny Steinmetz is ramping up his involvement in Israel's capital market. Possibly urged by Israeli banker David Granot, who knows the local market inside-out and who joined his business group a year ago, the cryptic Israeli businessman is in early negotiations to buy a local brokerage or alternatively another company involved in the local capital market.

Steinmetz, who is known abroad by virtue of his engineering empire, Bateman, evidently prefers not to start his capital market involvement from scratch, but to build on an existing platform. He hadn't built Bateman, either: Steinmetz acquired the controlling interest in Bateman, which handles heavy engineering projects such as mining, quarrying and power production, in early 2002. After he bought the company, Steinmetz delisted it from the Johannesburg Stock Exchange, re-registered it in the Netherlands, tossed out its management and put in new people and changed its spheres of activity to a large degree.

Granot left his job as chief executive of the First International Bank of Israel (Bank Beinleumi) a year ago and joined Steinmetz's business group, which operates almost entirely outside Israel.

In recent years Steinmetz has been operating in the world equity markets through Capital Markets, his London-based investments arm - it is controlled by BSG (Benny Steinmetz Group). The group also operates in Russia's markets through a local brokerage that it owns.

Steinmetz had been mentioned in the past as a candidate to buy Bank Leumi. He may be loath to talk to the press, but his associates clarified that he didn't want to buy a bank. Three years ago, however, Steinmetz had to break his habitual reticence when raising money in London for his companies Bateman Engineering BV, Bateman Litwin and Nikanor. Because of the offering process, Steinmetz had to shed light on at least some aspects of his business.

Capital market sources believe that Steinmetz is personally worth about $3 billion. Bateman Engineering is worth nearly 100 million pounds on London's AIM market. Last week it announced that Pieter Du Plessis was named chief financial officer, replacing Jonathan Ben-Cnaan, who is leaving in March. The CEO is Sivi Gounden.

Bateman Litwin, an engineering, contracting, chemical technologies and project management company, is worth something over 220 million pounds. Nikanor, which engages mainly in mining operations, including in Africa, is worth about 850 million pounds.

In July 2007, perhaps charmed by the ease at which companies were raising money from Israel's institutional investors, Steinmetz decided to raise a billion shekels for BSG, for starters.

Steinmetz also owns another Israeli company, Scorpio Real Estate, which was founded in 1998 and invests in East European property. Scorpio went public on the Tel Aviv Stock Exchange a year ago.