Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) estimates that its Orange brand is worth over NIS 8 billion. The claim appears in a request to the Tel Aviv District Court to approve an extraordinary NIS 1.4 billion dividend, which does not meet the distribution criteria.
Partner says that the value of its equity capital according to accounting standards is approximately NIS 1.9 billion. However, it also estimates that its customer relations and other intangible assets bring the value called Partner to over NIS 10 billion.
Partner wants to distribute the extraordinary dividend to help Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), which owns 44.84% of Partner, and Suny Electronics Ltd. (TASE: SUNY), which owns 1.41%, both of which are controlled by Ilan Ben-Dov, repay debt they took on the form of bank loans and bond offerings to acquire Partner from Hutchison Telecommunications International Ltd. (NYSE: HTX; HKSE: 2332).
Repayment of the debt, and the assumption that it does not affect Partner's financial soundness, assumes that the company can create a free cash flow of at least NIS 1 billion a year. The request for approval states, "The strength, stability and impressive cash-flow (generated from on-going activities) of this major corporation, even after the requested distribution, are solidly supported by the scholarly economic and accounting opinion given by Ernst & Young (Israel) Ltd."
Partner says that the banks and financial institutions have already agreed to the dividend, but noted that the public also owns the company's Series 1 bond.
Partner's share priceclosed on Nasdaq on Friday at $20.36, giving a market cap of $3.14 billion. The share was unchanged in early trading on the TASE today at NIS 75.21.
Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010