Israel Corp. is considering the sale of up to 7 percent of its stake in Israel Chemicals Ltd. (ICL) as part of a planned offering on the New York Stock Exchange.
The holding company, which holds a majority interest in ICL, said it was considering the sale of shares to an international financial company, which would then sell or distribute them or sell them directly or a combination of both options. The Israel Corp. board of directors instructed management to proceed with plans for such a sale. Israel Corp. holds a 52.3 percent stake in ICL. ICL shares currently trade only on the Tel Aviv Stock Exchange.
"The purpose of the deal is to increase the flexibility of the company’s capital structure and create the necessary infrastructure, and reduce the company’s net debt," Israel Corp. said in a statement. The holding company added that it considers its holdings in ICL as a strategic investment. Israel Corp. said that if the deal is consummated it would take place during 2014. However the company said that the board had not yet decided on a deal, its structure, or the exact number of ICL shares to be offered, and there is no assurance that the deal will in fact be completed.
In a related development, ICL released its official fourth-quarter and annual results after pre-releasing them in February. Strong competition in the global fertilizer market and a drop in potash and bromine prices led to a sharp drop in fourth-quarter net profits, which fell 43 percent to $119 million from $208 million in the corresponding quarter in 2012. Fourth-quarter revenues totaled $1.42 billion versus $1.3 billion last year.