IDB closing down Orama Partners

The Orama investment bank for high tech companies, Michael Recanati's pet project, will close its Orama Partners subsidiary and cut back its activity in Israel.

Only two years ago, the IDB group launched its Orama group investment bank with a blast of publicity. At a press conference in honor of the event, Michael Recanati, Oudi Recanati's younger brother, presented a glorious gallery of partners in the Orama group's New York subsidiary - Orama Partners: Compaq, Siemens, Softbank, Lucent, Paul Allen, Michael Dell, and Richard Li, son of Li Ka-Shing.

Michael Recanati had previously been known mostly for a family feud, on account of which he had to leave his post as VP of the Recanati family shipping company, and the collapse of an Internet venture he founded. He declared that Orama would become "the leading Israeli bank in New York."

Michael Recanati explained that the bank's raison d'etre was the enormous potential of Israeli high tech: "There are a hundred funds for helping every start-up, but when these companies reach more mature stages and want to break out, they face problems." In order to solve the problem, the Orama group set up a US subsidiary, Orama Partners, for providing consultant and financial coverage services to companies raising capital in private placements.

In retrospect, Orama did not solve the problems of Israeli high tech. Another recent development is the signing of an agreement, whereby Oudi Recanati's family will sell its shares in IDB. It appears that Leon Recanati, Oudi and Michael's cousin, who is slated to lead the group, has decided there is no justification for maintaining the company.

An IDB group spokesman today announced, "In the context of restructuring, the Orama board decided to close the US branch of the company and to cut back the Israeli branch. Orama will continue to support its portfolio companies in (the areas of) financing rounds, access to global markets, and management, through the IDB Holdings headquarters." As far as is known, the restructuring will include the end of Michael Recanati's employment as Orama chairman.

In August 2000, one year after its founding, Orama reported its business results - a NIS 15 million loss as of the end of June 2000, mostly due to the huge salaries of its executives: Orama group chairman Michael Recanati and Orama Partners president and CEO Alan R. Batkin.

Orama's reports had to be published for a deal that transferred ownership in the company from the Ilanot Batucha brokerage to IDB Holdings, which controls Ilanot Batucha. Under the deal, IDB paid NIS 3.8 million for the Orama shares and took upon itself another NIS 28 million in owners' loans.

Orama, which is committed to participate in financing rounds up to a total investment of $20 million, according to press reports, has taken part to date in the private placements of start-ups Foresight, Packet Technologies, Mavix, Cyber Ark, and Team Works Technologies.

Published by Israel's Business Arena on November 18, 2001

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