ICL CEO’s Abrupt Departure Raises Questions About Strategy

  • Stefan Borgas says left Israel Chemicals for personal reasons
  • Shares have fallen more than 60% during his four-year tenure

The abrupt resignation of Israel Chemicals Chief Executive Officer Stefan Borgas is raising questions about the company’s strategy just as it has embarked on a major overhaul.

Borgas, who cited personal reasons for leaving, was restructuring Israel’s second-largest publicly traded company as it faced increasing tax bills and a decline in fertilizer prices globally. Asher Grinbaum, until recently the company’s executive vice president and chief operating officer, will serve as CEO temporarily, ICL said in a filing Sunday to the Tel Aviv Stock Exchange.

“The sudden resignation of ICL’s CEO this weekend raises big questions,” Ilanit Sherf, Tel Aviv-based head of research at Psagot Investment House Ltd., said in an e-mailed note. “We obviously can’t provide answers or point to the real reason, but when a CEO leaves before he’s finished planning and implementing a multi-step strategy he had embarked on from his first day on the job, we choose to assume that the reason he left wasn’t personal but due to disagreements over the company’s strategy.”

The stock closed down 1.4 percent at 15.41 shekels Sunday in Tel Aviv, its biggest drop since Aug. 25. The benchmark Tel Aviv 25 index declined 1.7 percent on the day.

Cost Cutting

ICL, a Tel Aviv-based company that develops, manufactures and markets chemical fertilizers, slumped more than 60 percent during Borgas’s four-year tenure as the company faced increasing government scrutiny over revenues from natural resources. 

To boost sagging profits, Borgas had focused on cost-cutting measures such as freezing investments in Israel and reducing the workforce, while seeking to broaden the company’s operations outside Israel, from Ethiopia to China. His exit came amid increasing tension with the company’s largest shareholder, Idan Ofer, according to Israel’s Globes newspaper.

Borgas said that “after four successful years of leading ICL through a historically dramatic downturn of the commodity industry, I feel that it is time for me to move the center of my life back to Europe,” according to the statement. A spokesman for ICL who said in a text message that Borgas resigned “due to personal reasons” didn’t immediately reply to questions about tension between Borgas and Ofer.

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