The Bank of Israel is essentially forcing Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5), controlled by Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG), to sell its stake in credit card clearing firm Gama Management and Clearing Ltd. Sources inform ''Globes'' that, a few months ago, the Bank of Israel sent a letter to the banks ordering them to include Gama in Tshuva's borrower's group of Delek, one of Israel's largest single borrowers.
When the Bank of Israel's order is implemented, it will make it harder for Gama to obtain credit from the banks to finance its regular business. Delek Group will prefer to direct new credit to more profitable projects, such as in energy. For this reason, it seems that when the order comes into effect, Delek and Phoenix will choose to sell Gama.
Nonetheless, so far as is known, the Bank of Israel is giving the banks time to implement the decision, and it will probably only come into effect at the end of the first quarter of 2011. Phoenix is in talks with the banks and with the Bank of Israel in an attempt to get the decision revoked on the grounds that Gama is not part of Tshuva's borrower's group.
In any event, no final decision on the matter has been taken yet, and the Banking Supervision Department is continuing its review.
In its letter, "Gama Management and Clearing - links to the Tshuva group", the Bank of Israel says, "Our examination, in view of the circumstances prevailing at Gama since its acquisition, found that Gama is part of the borrower's group to which Phoenix belongs (the Tshuva group), beginning from when the shares were acquired in April 2008."
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2010
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