Scailex Gains as Samsung Distribution Extended: Tel Aviv MoverShoshanna Solomon
Scailex Corp., which earlier this year sold a stake in Partner Communications Co., surged the most in more than five months after it extended a handset-distribution agreement with Samsung Electronics Co.
The shares soared 18 percent, the biggest gain since Dec. 19, to 4.002 shekels, in 8.3 times the three-month average volume, at the close in Tel Aviv. Suny Electronic Ltd., which owns a 79 percent stake in Scailex, jumped 8.7 percent to 1.841 shekels. The benchmark TA-25 Index fell 0.1 percent, bringing the week’s decline to 0.6 percent.
Scailex, whose rating was cut to selective default by Standard & Poor’s Maalot on April 10, said it lengthened its distribution accord with the Korean electronics manufacturer through 2014 and will renegotiate a renewal in the third quarter of next year. The shares have declined 19 percent this year while the benchmark gauge advanced 3.6 percent.
“The sale of Samsung’s cellular handsets is significant for Scailex especially in light of its heavy debt situation, which led it to sell a stake in Partner,” Ori Licht, head of research at I.B.I-Israel Brokerage & Investments in Tel Aviv, said today by phone.
Israeli consumers are able to purchase handsets separately from service contracts as a result of government deregulation of wireless carriers. A Samsung Galaxy S3 handset sells for 2,140 shekels ($588) at mobile virtual network operator and discounter Rami Levi Communications, while an Apple iPhone 5 sells for 3,200 shekels.
S&P Maalot cut its rating from ilCC after Scailex failed to make a debt payment of 60.5 million shekels to bondholders in March as it added a “going concern” warning to its full-year results. Scailex, which held 44.54 percent of Partner, agreed to sell a 30.73 percent stake in the company to an Israeli unit of Saban Capital Group. Inc., according to a filing on Nov. 30.