Israel Chemicals said it would freeze $1.6 billion in assets to protest proposals to increase the tax burden on the company, according to Bloomberg. On this news, the stock rose 4.3% on Wall Street and 3% in Tel Aviv, which was its biggest gain since March. The company harvests potash, a chemical used in fertilizers and other minerals from the Dead Sea, and is being threatened with its second tax hike in 2 years.
Allianz Global Investors is bullish on Israel Chemicals. Baxter Hines, of NFJ Investment Group, a unit of Allianz, told Bloomberg, “The long-term fundamentals for food and fertilizer pricing is strong. It’s just that you have some short-term types of regulatory and cartel issues that have to be worked out.”
ICL is Israel’s second-largest publicly traded company and has a monopoly on Potash in the country. The Israeli government’s proposal to impose a windfall tax has been a challenge to ICL’s share price, and means an additional $400 million to the government. Neta Schoener, spokeswoman for ICL, says the tax burden, “is the highest and most extreme in the world, ” but thinks the company can thrive if, “the rules become internationally competitive and predictable again.”