Business in Brief: March 13

Israeli firms face major losses in Japan; Israeli firms face major losses in Japan; Layoffs at ‘Ma’ariv’ to begin this month

By GLOBES CORRESPONDENTS
March 13, 2011 23:22
3 minute read.
Houses are swept by a tsunami in northeast Japan.

tsunami hits Japan_311 reuters. (photo credit: KYODO Kyodo / Reuters)

Israeli firms face major losses in Japan

• By KOBY YESHAYAHOU

Clal Insurance Enterprises Holdings Ltd. on Sunday notified the Tel Aviv Stock Exchange that its wholly owned UK subsidiary Broadgate Underwriting Ltd., syndicated with Lloyds of London, faces NIS 28 million in losses from Friday’s earthquake and tsunami in Japan. The preliminary estimate is based on the underwriting year 2010 and does not include the cost of reinsurance purchases by Broadgate, whose residual is estimated at NIS 11m.-NIS 17m.

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The expected Japan losses come on top of the company’s exposure to the earthquake in New Zealand on February 22, estimated at NIS 18m. for the underwriting year 2010 and NIS 14m. for the underwriting year 2011 (including the cost of reinsurance purchases). The estimate is based on the earlier earthquake in New Zealand in September 2010 and on market estimates from the February quake.

Ham-Let (Israel-Canada) Ltd., a manufacturer of valves and fittings, notified the TASE that Japan accounted for 15 percent of company sales in 2010. The company’s offices in Japan were not damaged in the earthquake, and all employees are safe, it said. However, the subsidiary’s warehouse stores inventory booked at NIS 1.4m., and it is difficult to estimate damage caused or whether it will be covered by insurance.

Both Clal Insurance and Hamlet are units of Nochi Dankner-controlled IDB Holding Corp. Ltd.

Israeli firms face major losses in Japan

Globes correspondent

Export-credit-risk insurance company Israel Credit Insurance Co. Ltd. (ICIC) estimates that Israeli exporters are exposed to $220 million in money owed to them by Japanese companies. According to ICIC, 50 percent of the exposure to the Japan earthquake and tsunami is covered by foreign risk-credit insurance, which includes coverage for major damage caused by an earthquake or tsunami. The other 50% is not covered and leaves Israeli companies vulnerable to nonpayment by their Japanese customers. The main areas of Israeli exports at risk include medical devices, hi-tech products, chemicals and metal products.



ICIC has opened a hot line for Israeli exporters to Japan. ICIC is owned by Harel Insurance Investments and Financial Services Ltd., Bituach Haklai Ltd. and Euler Hermes.

Layoffs at ‘Ma’ariv’ to begin this month

• By LI-OR AVERBACH

Massive cuts at Hebrew daily Ma’ariv, including the firing of dozens of employees, will begin this month, people familiar with the matter told Globes Sunday. It is not yet clear which sections of the paper will see the cutbacks and job losses, the sources said. They likely will include some journalists, but mainly administrators, they said. The layoffs are part of the sharp cuts over the coming months that Ma’ariv Holdings Ltd. chairman Zaki Rakib is expected to announce in April.

Ma’ariv Holdings’s board of directors has given Rakib full support to make the cuts, which include the firings, pay cuts and lowering printing costs, probably by reducing the size of the paper, the sources said. Ma’ariv will reduce both its weekday and weekend editions, including its TV guide and its woman’s magazine, they said.

Ma’ariv declined to comment on the report.

Ma’ariv has begun talks to sell its printing house to Sheldon Adelson’s free newspaper Israel Today. Haaretz Group’s printing house currently prints Israel Today, and the loss of the printing contract and distribution to rival Ma’ariv would be a serious financial blow, costing Haaretz and its owner, the Schocken Group, tens of millions of shekels a year.

Proceeds from the sale of the printing house could ease Ma’ariv Holdings’s dire financial condition. Bank Hapoalim has called in the company’s NIS 106 million debt within a week. Ma’ariv confirmed the negotiations, but Israel Today declined to comment.


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