Koor Industries Ltd. (TASE:KOR) has sold an additional 3.5 million shares in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ) for NIS 376 million, reducing its holding to 26.2 million shares. The latest sale followed the sale of shares for NIS 918 million last week.
Koor said that the sale was necessary to reduce the credit taken from Citigroup Inc (NYSE: C) and Morgan Stanley (NYSE: MS) to buy the shares. Koor added that it will report a loss of NIS 91 million on the sale in its financial report for the third quarter of 2011, on top of the loss from the drop in value of the shares reported in the financial report for the second quarter.
Koor said that the value of its holding in Credit Suisse, based on the closing price of CHF 23.60 on the Zurich Stock Exchange on Friday was NIS 2.85 billion. The balance of the deposits on lien to Citigroup and Morgan Stanley is NIS 1.5 billion, and the difference between the value of the Credit Suisse holding and the net debt, after deducting the attached shares, is NIS 1.4 billion.
Credit Suisse's share price fell 0.4% in New York on Friday to $30.34, giving a market cap of $36.4 billion.
Koor added that the sales improved the net debt to guarantee ratio to 52%. If the ratio falls below 50%, the company has the right to release money from the attached deposits to raise the ratio to 55%. It also said that the appreciation of the shekel against the Swiss franc to NIS 4.541/CHF reduced the company's liabilities on shekel-Swiss franc options transactions from NIS 800 million to NIS 540 million (fair value).
Koor's share price rose 18.7% by mid-afternoon to NIS 36.35, giving a market cap of NIS 1.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2011
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