Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has succeeded in the institutional stage of an offering of shares and options. Demand totaled NIS 905 million, of which NIS 300 million was filled.
The offering closed at Cellcom's closing price on the Tel Aviv Stock Exchange yesterday, with orders at this price receiving 38.35% of the amounts ordered.
Discount Investment, which holds 44% of the shares in Cellcom and 47% of the voting rights, chose to participate in the offering, and bought shares in proportion to its holding. The offering was led by Epsilon Underwriting and Issuing, which is controlled by Discount Investment.
Meanwhile, Eduardo Elsztain, who controls the IDB Development-Discount Investment group, has expressed support for Cellcom chairman Ami Erel, in an attempt to dispel rumors of a rift between them that is liable to lead to Erel being replaced.
In a letter sent to Cellcom's directors yesterday, Elsztain writes: "Following recent reports, I wish to make clear that Erel and the board members of Cellcom Israel in general have my full support as regards the restructuring program, as well as my full appreciation of their leadership of Cellcom as it copes with the challenging market conditions and the fierce competition. I wish Erel, the board and the company every success in restructuring our company."
With rising competition in the local telecommunications market, Cellcom has suffered from declining business results. Against this background, the company announced a restructuring program designed to cut annual expenditure by NIS 150 million, through, among other things, a cut in payments to suppliers and a downsizing of the workforce; a reduction in annual investment to NIS 450-500 million; and a NIS 150 million bond buyback. Publication of the plan sparked rumors of tension between Elsztain and Erel, and speculation that Erel would not continue long in his post of Cellcom chairman.
Published by Globes, Israel business news - en.globes.co.il - on December 4, 2019
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