Blue Square, Dor Alon buy 49% of Diners

Blue Square will own 36.75% of Diners' fully issued and paid up share capital, while Dor Alon will own 12.25%.

diners club logo 88 (photo credit:)
diners club logo 88
(photo credit: )
Blue Square Israel and Dor Alon Energy have purchased a 49 percent stake of Diners Club Israel for NIS 21.3 million to offer their customers a financial platform for credit card and loan services. "Supermarket chains and petrol stations will be offering non-banking financial services in the same way as the likes of Walmart in the US and Tesco and Sainsbury in the UK have done in recent years," said David Wiessman, CEO of Dor Alon. Blue Square will own 36.75% of Diners' fully issued and paid up share capital, while Dor Alon will own 12.25%. The partnership with Diners Club Israel, a subsidiary of CAL, will be financed by a loan from CAL to Blue Square Israel and Dor Alon. "This partnership is a result of a revolution that is taking place in Israel's credit card market. The main trigger is the increase in the number of consumers using credit card companies instead of banks for financial activities, such as rescheduling debts or obtaining financing," CAL CEO Boaz Chechik said. "The introduction of the overdraft reform from January 2006 is another factor which will increase the potential of credit card usage as an additional source of available credit which is separate from customers' bank accounts." Chechik added that credit card issuing and clearance turnover would exceed NIS 110 billion this year, representing a forecast of 10% growth. Dor Alon and Blue Square also agreed to found a joint customers club, which will be incorporated as a partnership. Dor Alon will own 25% and Blue Square will own the other 75%. Members of the customers club will be entitled to receive Diners Israel credit cards. The joint credit card will be a revolving credit card. "We hope to recruit many more non-banking customers from the large customer base of Dor Alon through this strategic partnership," Chechik said. CAL said that to date it has 340,000 non-banking customers, which represents one-third of its total customer base. It sells 12,000 new credit products a month, and issued 55,000 of its Active non-banking revolving credit cards in the past six months.
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