Discount Investment Corporation published its financial results today, reporting a NIS 567 million profit in the third quarter of 2019. The profit is mostly attributable to a NIS 557 million one-time profit posted as a result of subsidiary Property and Building ceasing to be the controlling shareholder in Bayside Land Corporation.
Despite its large third quarter profit, Discount Investment finished the first three quarters of 2019 with a NIS 66 million net loss, after posting a NIS 540 million loss on its holding in telecommunications company Cellcom, another subsidiary. Cellcom, whose current market cap is NIS 1.1 billion, is set to raise NIS 400 million capital in December. Discount Investment is expected to take part in the round.
Discount Investment's board of directors discussed Cellcom's move, and approved the additional investment in it. As of the end of September, Discount Investment had NIS 455 million cash, with NIS 942 million of its debt (principal and interest) falling due in the next two years.
Cellcom's financing round is part of a comprehensive recovery plan that provides for a NIS 150 million annual reduction in the company's expenses, a NIS 450-500 million yearly reduction in investment, a buyback of NIS 150 million in bonds, etc. The board of directors, with veteran chairman Ami Erel at the head, is leading this plan. The plan has nevertheless caused tension between Erel and IDB Development controlling shareholder Eduardo Elsztain. Market sources therefore believe that Erel will not continue in his position for long.
Published by Globes, Israel business news - en.globes.co.il - on December 1, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019