Global Factoring Ltd. will continue to buy credit insurance for its transaction from Allianz SE (NYSE:AZ; DAX:ALVG) subsidiary Euler Hermes (XETRA; Paris: EUE) for another year, following a selection process. Israeli and foreign companies participated in the process. Euler Hermes has provided Global Factoring with more than NIS 150 million in credit insurance.
In addition to Euler Hermes, sources said that two Israeli credit insurance companies participated in Global Factoring's tender - Israeli Credit Insurance Company Ltd. (ICIC) (TASE:BSSC) and Clal Credit Insurance Ltd.. Foreign participants included American Insurance Group Inc. (NYSE: AIG), and France's Coface. Coface owns Business Data Israel.
Factoring is a financial service involving the purchase of regular commercial debt from the debt holder. The factoring company undertakes the risk of the credit portfolio purchased from the client.
Global Factoring CEO Yaron Tiktin said, "With the investment of Isracard in the company, we expect our business to receive substantial leverage."
In late 2007, Bank Hapoalim (TASE: POLI; LSE:80OA) credit card subsidiary Isracard Ltd. acquired the controlling interest in Global Factoring at a company value of NIS 48 million, and will also provide a NIS 24 million owners' loan.
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2008
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