Sources inform ''Globes'' that the IPO of Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) has been postponed. After a quarter rife with scandal, fines, and regulators' reprimands, ICC-Cal's controlling shareholder Israel Discount Bank (TASE: DSCT) has postponed the IPO, planned for April at a valuation of NIS 3 billion.
A well-informed source said, "An IPO by ICC-Cal in April is no longer practical. Preparations have been called off, and the offering will be delayed until later, or even the end, of the year. We don’t really know when it will take place."
The source added that Discount Bank's priority is now its own planned rights issue and the sale of its holding in First International Bank of Israel (TASE: FTIN1;FTIN5). The IPO of ICC-Cal is therefore "less urgent now", the source said.
Since Discount Bank's board of directors never made a formal decision to float ICC-Cal, nor when the IPO would be held or at what valuation, there is no need to take a formal decision to postpone the offering.
Discount Bank declined to comment on the report.
The main reason for the postponement is reportedly the expected change in ICC-Cal's business model. Following the flaws uncovered in the clearing of online transactions, ICC-Cal's board of directors ended the company's clearing of online pornography transactions. At the same time, the board decided to revamp its online clearing activity and switch to a "clean and balanced" business model, in order to reduce risk.
ICC-Cal CEO Boaz Chechik is due to present to the board the new model and the improvements in the company's risk management model next month.
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2010
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