Comments by IDB Holding Corp. Ltd. (TASE:IDBH) chairman and CEO Nochi Dankner that he had not yet realized the full potential of his investment in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ) were today validated when IDB unit Koor Industries Ltd. (TASE:KOR) announced that it has obtained CHF 330 million (about NIS 1.2 billion) in addition non-recourse credit from Citigroup Inc. (NYSE: C).
Koor's announcement came after it bought 0.5% of Credit Suisse for NIS 900 million, boosting its stake to 1.73%
Dankner began buying Credit Suisse shares a year ago, reaching at one point a holding of 3%. He sold some of the shares during the rally in financial stocks, reducing the stake to 0.7%. Koor made NIS 2 billion in capital gains on the sales.
Dankner then concluded that a new wave of sell-offs was pending in the world's stock markets, creating opportunities for buying more Credit Suisse shares. Koor began the new round of purchases earlier this month.
Citibank extended the credit line over three years. The credit comes on top of Koor's credit line from Morgan Stanley (NYSE: MS), the outstanding amount of which is CHF 186 million (about NIS 680 million).
Koor's board has allocated NIS 5 billion for its Credit Suisse venture. The timing of latest purchases seems good: Credit Suisse rose 4.2% on the New York Stock Exchange yesterday. Koor's share rose 1.6% today to NIS 92.41.
Published by Globes [online], Israel business news - www.globes-online.com - on July 14, 2009
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