Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) subsidiary Clal Finance Ltd. (TASE:CLFN) today completed the sale of 16.5% in AVA Financial Ltd. for $1.9 million. The stake represents half of Clal Finance's holding in AVA.
Clal Finance did not disclose the name of the buyer of the British Virgin Islands-registered company.
The buy also paid Clal Finance $500,000 for a 12-month option to buy its remaining 16.5% stake in AVA for $7.44 million.
With the closing of the deal, AVA repaid the $1.4 million balance of its owner's loan to Clal Finance. AVA has thus repaid in full the $2.3 million owner's loan it received.
Just before the closing, AVA distributed a dividend, of which Clal Finance's share was $2.5 million.
Clal Finance's cash flow from the sale, including repayment of the owner's loan and the dividend is $6.3 million (NIS 23.3 million), and the company believes that it will report an insubstantial capital gain on the sale in the fourth quarter of 2009.
Clal Finance CEO Tal Raz said, "Clal Finance is formulating a strategy to refocus on its core business. The sale of AVA is the first step in the execution of this strategy. I thank AVA's entrepreneurs who brought the company to success in online trading in Israel and internationally."
Clal Finance's share rose 2.7% in morning trading today to NIS 3.38, giving a market cap of NIS 362 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2009
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