"It's difficult not to worry about the economic situation. But in the face of the many exogenous challenges facing the economy (the security-political situation, the crisis in major foreign markets, etc.), there is also the effect of tighter regulation and a sharp drop in activity in the capital market on the TASE," said Clal Industries and Investments Ltd. (TASE: CII) chairman Avi Fischer, following the publication of the company's financial report for the second quarter of 2012 yesterday.
Clal Industries posted a net profit of NIS 16 million for the second quarter, when it was still controlled by IDB Holding Corp. Ltd. (TASE:IDBH), compared with a net loss of NIS 3 million for the corresponding quarter of 2011. On July 5, IDB completed the sale of 49.9% of Clal Industries to Len Blavatnik's Access Industries Inc. for NIS 1.27 billion.
Clal Industries is a holding company, whose main holdings are Clal Biotechnology Industries Ltd. (TASE: CBI) (56.8%), Hadera Paper Ltd. (TASE: AIP; Pink Sheets: HAIPF) (59.1%), Golf & Co. (TASE:GOLF) (62.1%), Jordan Valley Semiconductors Ltd. (34%), and Mashav Initiation and Development Ltd. (75%). Ireland's CRH plc (ISE; LSE; NYSE: DAX: CRH) owns the other 25% of Mashav, which wholly owns Nesher Cement Enterprises Ltd. and 50% of haulage, logistics and infrastructures company Taavura Holdings Ltd. (The Livnat family owns the other half of Taavura).
Following the sale of several companies during 2011, including Fundtech and 013 NetVision Ltd.. Mashav accounts for 45% of the value of Clal Industries' portfolio. Mashav was due to be sold to the Livnat family for NIS 1.32 billion in a deal signed in December 2011 (which would have netted Clal Industries a capital gain of NIS 700-800 million), but the sale was cancelled two weeks ago, mainly because of regulatory measures that raise questions about Nesher's future business results.
Clal Industries' board of directors approved the distribution of a NIS 65 million dividend, which will be distributed on September 20. Access Industries' share of the dividend will be NIS 34.5 million.
Clal Industries' debt totaled NIS 1.9 billion at the end of June, including NIS 1.5 billion owed to bondholders. The company's bonds are currently traded at prices reflecting yields of 2.9-65%.
Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2012
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