Israel Corp is considering splitting into two companies, the holding company which holds a majority stake in Bazan Group and Israel Chemicals, said on Wednesday.
The statement to the Tel Aviv Stock exchange said that its board of directors has accepted the recommendations of management and examine a strategic process of splitting its holdings as part of an effort to create value for investors.
According to Israel Corp. the proposal being considered would split its holdings in IC Power, IC Green Energy, Qoros auto venture in China, Zim Israel Shipping Services and Tower Semiconductors Ltd. into a separate company.
IC Power owns and operates power plants in Peru and other Latin American countries. Israel Corp. would retain its holdings in Bazan Group, which operates Israel's largest refinery and in Israel Chemicals.
The statement added that Israel Corp. will consider spinning off Bazan Group at a later date.
Israel Corp. said it believed the process will be completed within six to 12 months. After completion, Israel Corp. would continue to trade on the Tel Aviv Stock Exchange and the new company will list on the TASE or on a foreign exchange.
Following the spin off Israel Corp. will halt investments in new companies. "Our aim is to increase the exposure to the investing public of the huge potential of our holdings," said Amir Elstein, Israel Corp.'s board chairman.
The decision to split its holdings into two separate companies follows the liquidation of its Better Place, electric car venture and huge losses at Zim.
"The move can greatly enhance the value of Israel Corp. and bring in foreign investors," said Roni Biron, a UBS analyst who covers the holding company. He noted that Israel Corp. is currently trading at a substantial discount. Shares in Israel Corp. were up by over 8% in trading on the TASE following the announcement.
