Following the liquidation of electric car venture Better Place and the heavy losses of Zim Integrated Shipping Services Ltd., Israel Corporation (TASE: ILCO) management has notified the Tel Aviv Stock Exchange (TASE) that it is considering splitting into two companies.
The statement said, "The company's board of directors has accepted the recommendation of the management and decided to examine a strategic process of splitting the company's holdings to create value for the company and its overall shareholders by exposing the company's assets to the broad public of investors and greater focus on areas of activity, and creating structural flexibility in the corporate nature of the company, as well as business focus, which in the long term will assist in reducing the gap between the value of the company's assets and its stock market cap."
The measure being examined and the manner of its implementation involves a split in holdings so that IC Power, IC Green Energy, Qoros (the Chinese car venture), Zim, and Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) will be transferred to a new company with Israel Corp. continuing to control Israel Chemicals Ltd. (TASE: ICL) and Oil Refineries Ltd. (TASE:ORL).
Israel Corp. believes that the spinoff plan will be completed within 6-12 months. The company's debt to financing banks and bondholders will be relinquished by Israel Corp. which will continue holding the highly profitable Israel Chemicals. Israel Corp. will also consider spinning off Oil Refineries at a later date.
Following the spinoff, Israel Corp., which will hold Israel Chemicals and Oil Refineries, will halt investment in new companies.
The plan is that Israel Corp. shares and bonds will continue being traded on the TASE after the spinoff, while the new company will list on the TASE or an overseas stock exchange.
Published by Globes [online], Israel business news - www.globes-online.com - on June 26, 2013
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