Discount Investment to inject NIS 15m into Ma'ariv

IDB unit Ma'ariv Holdings posted an operating loss of NIS 240 million for the second quarter.

The board of Discount Investment Corporation (TASE: DISI) this morning reportedly decided to inject an additional NIS 15 million into Hebrew daily "Ma'ariv".

Sources inform ''Globes'' that the capital injection will probably be in the form of an owner's loan. The capital is in addition to the previous NIS 25 million owner's loan recently given to the newspaper. The new loan saves "Ma'ariv" from closing at this time. Discount Investment, a unit of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner, has invested NIS 300 million to date in the struggling newspaper, held through Ma'ariv Holdings Ltd. (TASE: MARV-M).

On Saturday night, "Ma'ariv" employees demonstrated outside IDB's offices in the Azrieli Towers in Tel Aviv, calling on Dankner to inject more money into the newspaper to save it.

IDB declined to comment on the report.

"Ma'ariv" journalists workers committee chairman Hagai Matar said, "There is no doubt that we are in very difficult time. I am pleased that "Ma'ariv" and the thousands of families who earn their living from it have been given the chance to prove our relevance to Israeli democracy. I have no doubt that we face many struggles ahead. The entire communications market is in a crisis the likes of which we have never known. This crisis jeopardizes the jobs of 30,000 people in the industry, weakens the media and journalism, and has serious repercussions for free speech in Israel."

Last month, Ma'ariv Holdings announced a new massive streamlining plan, which included the sale of one of its printing houses. The company hopes to receive NIS 200 million for the printing house's land in Bat Yam.

Ma'ariv Holdings also published dismal figures for the second quarter of 2012. Revenue fell to NIS 60.6 million for the second quarter from NIS 71 million for the corresponding quarter. The operating loss of NIS 240 million was partly due to a reduction in fair value of NIS 169 million on properties, and a NIS 31 million severance pay provision.

Ma'ariv Holdings posted a net loss of NIS 244 million for the second quarter compared with a net profit of NIS 36 million for the corresponding quarter. The company's first half loss was NIS 281 million. The shareholders' equity deficit was NIS 189 million at the end of June.

Ma'ariv Holdings said that its owners were seeking to raise additional capital for the company from an external investor. "In this context, the company reports that there are preliminary talks with several parties with regard to this investment. There is no certainty that these talks will turn into negotiations and an investment agreement in the company."

After raising capital, Ma'ariv Holdings will apparently restructure "Ma'ariv's" operations in a way that will greatly reduce its expenses (including on manpower), by turning the newspaper into an Internet-only news site on weekdays, and keeping print editions only for Fridays and holidays. "Globes" reported this plan in August.

Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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