Credit Suisse headquarters in Zurich / Wikipedia
The board of Koor Industries (TASE: KOR) has approved a change in the company’s investment policy. This move will enable the holding company to sell its shares in the Swiss bank Credit Suisse (NYSE: CS).
The new company policy will allow Koor to sell its stake in the equities market. They can decide to sell part or all of its shares in the Swiss bank. They will sell at what they think is appropriate in regards to current market conditions. Koor owns 2.4 percent of Credit Suisse.
Koor, began to accumulate this stake before the global economic crisis and viewed this investment as long term. Now they view this holding as a financial investment they are willing to sell. The Koor’s board made this decision after the Swiss bank recovered in price and due to a possible merger between Koor and Discount Investment Corp. (TASE: DISI) Both Koor and Discount are subsidiaries of IDB Holding Corp.
Koor recently valued this investment in Q1 of 2013 as being worth NIS 3.25 billion (roughly $910 million). This investment has risen by NIS 464 million ($130 million) in the five years they owned it. This puts the investment company ahead NIS 1 billion ($280 million) on paper. This amount does not include finance costs due to loans to foreign banks that helped finance this purchase. This will make the profit a little smaller.
IDB which owns some of Israel’s biggest companies has a plan to restructure debt to bondholders. These bondholders have submitted their own plan which would oust current Chairman Nochi Dankner. IDB has been selling off assets in order to reduce its debt load and the sale of Credit Suisse can help meet the goal.
Mr. Nochi Dankner is an Israeli businessman and investor. He currently is the controlling shareholder and Chairman of the IDB Group. Mr. Dankner also founded the Ganden Group, which has holdings in Israeli transportation, aviation technology and real estate. He also sits on the board of the Jewish Agency of Israel.