Israel Corporation (TASE: ILCO) is finally cutting its official ties with Chinese car co Qoros, a joint venture with Chery Automobile, in which it has invested $650 million over the past seven years to develop a range of sedan cars for sale in China and Europe. In the first half of 2014 alone, Israel Corp. invested $137 million in Qoros. The company announced that is released from all its guarantees to Cherie relating to the joint car venture. However, Israel Corp. controlling shareholder Idan Ofer will continue to invest privately in Qoros, along with Israel Corp. spin-off Kenon Holdings Ltd.(TASE:KEN: NYSE: KEN-WI) and Cherie.
Kenon Holdings announced today that it is prepared to extend a $64 million loan to Qoros, and thus release Israel Corp. from the $150 million back-to-back guarantee put up by Chery. After the move, Kenon Holdings, which is controlled by Idan Ofer and was split from Israel Corp last month, will hold 50% of the Qoros venture with Chery retaining the other 50%.
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Kenon said that the new loan will serve Qoros for the continued development of the company. Qoros began marketing cars last year and reports in China said that it sold 7, 000 cars in 2014, its first full year of marketing activities.
Published by Globes [online], Israel business news – www.globes-online.com