After hesitating for along time, the institutions that invested in Egyptian gas supplier EMG five years ago have been forced to recognize an aggregate loss of $93 million (about NIS 350 million in current terms) on the investment they made in June 2007.
At that time, Yosef (Yossi) Maiman sold to the institutions 4.3% of EMG in a deal that valued the company at $2.2 billion. Among those institutions were Harel Insurance Investments and Financial Services Ltd. (TASE: HARL); Menorah Mivtachim Holdings Ltd. (TASE: MORA); Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS); The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), and the Israel Infrastructure Fund (IIF).
Their investment is a non-marketable investment revalued once a year, and, except for IIF, it represents a very small proportion of the assets they manage.
Last year, following the series of sabotage attacks on the pipeline from Egypt to Israel and Jordan that put it out of action for long periods, the institutions made substantial write-downs of the investments in EMG. Now Harel, which holds a 1.2% stake in EMG, has reported that it will write off the balance of NIS 54 million (NIS 47 million in pension funds and NIS 7 million in its nostro).
Harel has a further exposure to EMG though its holding in IIF, which invested a substantial proportion of its equity in EMG. Today, IIF refused to disclose its current valuation, but the assessment on the market is that the fund has yet to recognize a substantial loss on the investment, and that it will do so shortly.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2012
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