Published On: Wed, Sep 17th, 2014

Bloomberg: Israel Chemicals May Abandon Tel Aviv Exchange in Fight to Evade Royalties


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“Bloomberg” has raised the possibility that Israel Chemicals Ltd. (TASE: ICL) could take advantage of its imminent public offering on the New York Stock Exchange, to delist from the Tel Aviv Stock Exchange, to further press the Israeli government to ease the new regulatory, tax and royalty regime being considered by the Sheshinski II committee.

According to “Bloomberg, ” Israel Chemicals, which has the second highest market cap on the TASE after Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), will use the NYSE listing as further leverage to pressure the Israeli government not to double the taxes and royalties paid by the company on the resources it mines. Israel Chemicals has already threatened to reduce its activities and investments in Israel if its demands are not met.

Trading turnover on the TASE has shrunk significantly since the TASE’s reclassification by index provider MSCI Inc. as a developed rather than an emerging market. The delisting of dualtraded companies like Mellanox Technologies Ltd. (Nasdaq:MLNX) and the IPOs of new major companies like Mobileye(NYSE: MBLY) and Ltd. (Nasdaq: WIX) has only exacerbated matters.

Israel Chemicals

Excellence Nessuah Investment House Ltd. Senior analyst Gilad Alper told “Bloomberg, ” “The listing of the (Israel Chemicals) shares in the US is ominous. It demonstrates the state of mind of the company and it might be followed by moving the actual business, and that’s a lot more meaningful and negative to the economy overall.”

Israel Chemicals said in response, “Israel Chemicals does not plan to delist from trading in Tel Aviv. In the announcement that the company published on the eve of its NYSE offering, it explained that listing for trading in the US is being carried out according to the strategy set by the company’s board of directors in August 2013. This strategy is to expand Israel Chemicals’ global investor base, improve liquidity in trading in the company’s shares, expand financing sources through exposure to other global markets, allow flexibility in managing the capital structure, strengthen Israel Chemicals financial and operational standing, and position it as a global copmpany.”

Published by Globes [online], Israel business news – 

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