IDB Development, controlled by Eduardo Elsztain, continues to realize its holdings in Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS). Yesterday evening, IDB Development reported that it had agreed to sell a further 7.8% of Clal Insurance in a deal that combines cash and IDB Development series 9 and 14 long-term bonds.
On Thursday, IDB Development held an auction for the sale of Clal Insurance sales in return for cash and bonds, led by Epsilon Underwriting and Poalim IBI. After receiving the bids from the underwriters, IDB Development decided to sell 7.8% of Clal Insurance (4,336,549 shares).
In the deal, IDB Development will sell 2.6% of Clal Insurance for NIS 82 million cash, at NIS 52.5 per share. It will sell 3.56% of Clal Insurance in exchange for series 9 bonds at a price of NIS 0.75 per bond, and a further 1.44% in exchange for series 14 bonds at NIS 0.78 per bond.
The bond buyback is at prices well below the bonds' par value. As a result, IDB Development will post a profit on early redemption of its bonds of NIS 73 million in its fourth quarter 2019 financials.
Before the current deal, IDB Development directly held 15.3% of Clal Insurance. In addition, IDB Development is invested in a further 15% of Clal Insurance through swap deals it made in 2018. The company has not reported whether the sale of shares in the current deal will be out of its direct holding or through the closure of part of the swap deals made with its banks.
IDB Development says that it continues to examine possibilities for the sale of a further 5% of Clal Insurance for cash and/or its series 9 and 14 bonds. Meanwhile, the institutional stage will take place tomorrow of an offering of the company's new series 15 bonds.
Published by Globes, Israel business news - en.globes.co.il - on November 17, 2019
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