bank leumi logo 88.
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Bank Leumi told the Bank of Israel on Wednesday it intends to sell its holdings in Africa Israel Investments Ltd. and Migdal Insurance Holdings and Finances Ltd. but retain its 18.4-percent stake in the Israel Corporation.
In mid-October, the Bank of Israel had ordered Leumi to sell off all its holdings in two of its three conglomerates by September 30, 2006, in accordance with a 1996 law forbidding banks from maintaining a stake in more than one "conglomerate" - defined as a company with more than NIS 1.73 billion in equity that is active in more than three areas of business.
Bank Leumi discovered that Africa Israel's equity had recently upgraded the company to a conglomerate, and its report to that effect to the Bank of Israel prompted the order.
Leumi's 19.9% stake in Migdal must, in any event, be reduced to 10% by March 31, 2007, to comply with the Bachar reform. Leumi is continuing efforts to convince the central bank that Migdal is not technically a conglomerate, in order to retain a 10% stake.
While Leumi's 15.8% part of Africa Israel's stock is to be sold by the September deadline, the bank intends to wait until up to March 31, 2008 to be sure that it is in fact required to part with its entire stake in Migdal.