BDI CODE 2014 - Israel's Leading Companies, Law Firms, Accounting Firms, Best Companies To Work For - page 12

Holding Companies
The year 2013, like the previous year, was characterized by requests to
implement debt arrangements and implementation of regulatory steps for
the purpose of safeguarding the public interest and to regulate the activities
of holding companies in Israel. Whether the reference is to the Centralist Law
that prohibits, inter alia, crossover holdings of financial and real corporations,
or the Haircuts Law, the purpose of which is to regulate debt arrangement
procedures, it appears that the legislator steps have not yet been fully exhausted
and their actualization in most cases is slow and awkward.
The results of holding companies’ activities, in a variety of arenas, are influenced
by the local environment and the situation in the international markets.
Overshadowed by the concern for economic stability and the recession in
Europe, the United States and even in China, the holding companies coped
during the past year with fluctuations in the markets that significantly affected
their business results, such as level of liquidity, value of their assets, credit
rating, financing conditions and more. One of the outstanding events that
occurred in the branch was the signing of a debt arrangement by the IDB
Company. In January 2014 the Court approved transfer of control of the
company to new owners, Eduardo Altshtein and Moti Ben Moshe. The outline
of the arrangement, which stretched out over almost two years, includes,
inter alia, erasure of about 30%of the total debt that was estimated at about
NIS 2 billion, stock issue of the subsidiary, IDB Development Company and
cash payment to creditors.
However, it appears that the negotiations concerning the second debt
arrangement for the Zim Shipping Company, controlled by the Israel
Corporation, are no closer to conclusion. In June 2014, the State notified
regarding its refusal to relinquish the Gold Share in the shipping company that
compels Zim to remain under Israeli ownership, and in addition, to maintain
a fleet of vessels for times of emergency and to receive approval from the
State to transfer more than 24% of its shares. In the framework of the debt
arrangement seeking to perform a “haircut” of more than 50% of the debt
of over $ 3 billion, the Israel Corporation is supposed to stream $ 200 million
to the Zim Company in exchange for 32% of the shares. The extent of the
assets of the ranked holding companies amounted to about NIS 610 billion
in 2013 and the equity capital of the holding companies was estimated at
about NIS 94 billion. The ranking of the leading holding companies will be
performed according to equity capital.
The Israel Corporation heads the ranking with equity capital estimated at
NIS 12.9 billion and earnings of about NIS 40 billion. The company operates
in a variety of areas of the economy – technology, energy chemicals, and
shipping. In second place is the Azrieli Group with equity capital of about NIS
12.7 billion. Among its main areas of activities we can mention finance, the
profit yielding real estate market, the energy market and more. In order to
focus on the profit yielding real estate market the group began to materialize
some of the companies it had been holding. Accordingly in June 2014 the
paint manufacturer “Tambour”, which had been held by the group was sold
to the Costo Group from Singapore for about NIS 500 million. Ranked in third
place was the Delek group with assets of about NIS 130 billion and equity
capital of about NIS 10.9 billion. The equity capital of Africa Israel Investments
Company stood at about NIS 7.3 billion in 2013 and it was ranked fourth.
The company operates in the fields of construction, infrastructures, industry,
hotels, real estate and more. Its subsidiary Africa Israel Industries operates in
the fields of steel and ceramics in Israel by means of Packer Steel and Negev
Ceramics respectively.
Alon Israel Oil Company, which reached tenth place in the ranking, concluded
2013 with equity capital estimated at about NIS 3.7 billion. In 11th place is
ranked Jerusalem Economy with earnings totaling about NIS 2 billion. S.
Shlomo Holdings was ranked in 17th place. The company operating in the
fields of leasing, rentals and insurance registered earnings of about NIS 3.5
billion during the last year.
Most of the companies appearing in the ranking of holding companies are
traded on the Tel Aviv Stock Exchange. Because of the transfer to the IFRS
method of accountancy reporting from 2008, receipt of most of the data
was made possible by means of this method and in fact the ranking of most
of the data is also presented using this method.
However, in certain instances in which the data was reported differently, such
as for holding companies within banking corporations, or duality companies,
the presentation of data is estimated and so on. In these cases we have added
the component of minority rights, where relevant, to the equity capital, in
order to minimize the distortions that might be caused by comparison of
companies reporting according to different regulatory methods. In the cases in
which we have estimated data of a holding company on the basis of addition
of data of the holding companies, a relative unification was performed when
the amount of holdings was less than 50% and a full unification when the
holdings exceeded 50%.
Share of Equity of the Leading Companies, out of the
Total Equity of All the Leading Companies in 2013
נתוני הגרף - שיעור הון עצמי של החברות המובילות מתוך סה"כ הון עצמי של כל החברות המובילות 3102
קבוצת דלק
כלל תעשיות
אלון חברת
13.7% 13.5%
7.8% 7.4% 7.2% 6.7%
4.2% 4.0% 3.9%
Israel Corporation
Azrieli Group
Delek Group
Africa Israel Investments
Arison Group
Discount Investments Company
Eurocom Group
Clal Industries
Alon Fuel Israel Company
1...,2,3,4,5,6,7,8,9,10,11 13,14,15,16,17,18,19,20,21,22,...480