Israel Corp. Mulls Partial ICL Stake Sale to Boost Trading

Israel Corp. is considering the sale of part of its 52.3 percent stake in Israel Chemicals Ltd. to increase trading volume in the shares of its fertilizer unit as it plans a listing on a foreign exchange.

Israel Corp. may sell a 7 percent stake in the harvester of minerals from the Dead Sea either directly or as part of a financing deal, according to a filing to the bourse today. The company said it still sees the chemicals maker as a strategic investment. The move will boost the holding company’s financial flexibility and lower debt, it said.

Israel Chemicals is planning to sell shares in New York after the stock dropped 38 percent in Tel Aviv amid a government review on natural resources that could lead to higher royalty payments. Shares of potash producers worldwide have fallen since July when Uralkali OJSC decided to halt cooperation with Belarus that controlled supplies from the former Soviet Union.

“This just shows how serious Israel Corp. is in listing Israel Chemicals outside of Israel,” Gilad Alper, a senior analyst at Petach Tikva-based Excellence Nessuah Brokerage Ltd. “They are actually working to provide heavy liquidity for the listing.” Free float of the chemicals maker’s stock is 33.7 percent of the outstanding shares, according to data compiled by Bloomberg.

Share Overhang

Israel Chemicals shares, with the fifth-largest weighting on the benchmark TA-25 Index, dropped 1.8 percent to 29.57 shekels at the close in Tel Aviv, weighed down by “the overhang of the share sale”, Alper said. The gauge advanced to a record as Israel Corp. shares advanced 0.7 percent.

The chemicals maker said in November it is seeking to trade shares abroad to reach global investors and make acquisitions. A foreign listing will also better protect the company against “the possible further deterioration of Israel’s business environment and stock market,” the company said in an e-mailed statement to Bloomberg on Jan. 5.

Stefan Borgas, chief executive officer, said in December that “frequent and unplanned regulation” in Israel is making it difficult to grow in the home market.

ICL’s 2013 profit fell 37 percent to $819 million, according to a statement to the Tel-Aviv Stock Exchange today.

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