Business in brief: July 20

ILA report details problems in marketing of land; index Ventures plans to expand Israel investments; state of Economy Index slows.

By GLOBES CORRESPONDENTS
houses 88 248 (photo credit: Courtesy)
houses 88 248
(photo credit: Courtesy)
ILA report details problems in marketing of land
• By MOSHE LICHTMAN / Globes
The Israel Land Administration biannual report details serious problems in all aspects of the ILA’s operations, especially in the marketing of land.
Director Yaron Bibi, who resigned from his position two weeks ago, said in the report, “It is difficult to bridge the ILA’s master targets – continuing the massive marketing and regular operations – at a time of rising demand for the ILA’s services, which require the allocation of its resources (and possibly additional resources) and personnel, and moving forward on the reform, which creates uncertainty among employees and also requires the allocation of resources.”
During the first half of 2011, the ILA marketed land for 8,447 housing units, 7 percent more than in the first half of 2010, and 80% more than the average in the corresponding periods in 2006-10.
This figure does not include Monday’s announcement by Housing and Construction Minister Ariel Atias for the marketing of land for 6,000 housing units. By the end of July, the ILA will be marketing land for 14,000 housing units, 58% of the government’s annual target, set in 2009.
The 2009 cabinet decision sets marketing targets of land for 25,000 housing units a year in 2010-11, through tenders.
Land for an additional 10,000 housing units will be marketed via exemptions from tenders (such as for the expansion of kibbutzim and moshavim).
The ILA exceeded the government target for 2010, when it published tenders for land for 26,050 housing units. When land marketed via exemptions is added, the ILA marketed land for 34,253 housing units in 2010.
Most of the land was marketed late in the year, because of the recyclity in the handling of tenders, and actual construction will not begin for 2-3 years from the date of the win.
“If these two reforms succeed at the ILA and the planning commissions, I believe that the ILA will meet the marketing target for 2012, as well,” said Bibi.
Index Ventures plans to expand Israel investments
By BATYA FELDMAN / Globes
Index Ventures is planning to increase its investment allotment for Israeli start-ups, Reuters has reported.
The European fund can make the investments from a 350 million euro fund for early-stage companies and a 400 million euro fund for later-stage investments. A tenth of the fund’s portfolio companies are in Israel, with the rest in Europe and the US.
Index Ventures was founded in 2006 as a Swiss fund and manages $3 billion.
Index Ventures partner Saul Klein told Reuters, “We believe there are amazing opportunities to invest in Israel.
“We can write a check for as little as $50,000 and we c a n write a c h e c k for as much as $75 million. We have the capital to invest. The constraint is finding great opportunities,” he added.
Klein moved to Israel two years ago, and is leading the local investment strategy. He said that Index Ventures has invested more than $50 million in Israel.
Israeli portfolio companies include software testing procedures developer Evolven Ltd., Optier Ltd., MyHeritage Ltd., oncology treatments developer Novocure Ltd., and Zend Technologies Ltd.
Last month, it led the $10.5 million second financing round in PC troubleshooting company Soluto Ltd.
Klein said that Index Ventures was interested in medical devices, and Internet and mobile software developers.
State of Economy Index slows
By Globes’ correspondent
The Composite State of the Economy Index rose by 0.2 percent in June 2011, and by 2.7% in the first half of the year, the Bank of Israel reported Tuesday. Although the index figure reflects continued economic expansion, the growth slowed in the second quarter compared with preceding quarters.
Gains in the industrial manufacturing and the trade and services proceeds indices drove the growth, but were partly offset by drops in the imports of goods and the exports of goods indices.
Natural gas tanker buoy approved
By AMIRAM BARKAT / Globes
A National Outline Plan 37 (oil and gas facilities) committee approved the Ministry of National Infrastructures’ application for construction of a buoy terminal of natural gas tankers on Tuesday.
The government and Israel Electric Corporation are working on the plan under a tight as possible schedule in view of the disruptions in Egyptian natural gas deliveries, Yam Tethys’ dwindling reserves, and the likelihood that gas from Tamar will only come on line in early 2013.
High-speed Internet cost cut by 50%
By YOSSI NISSAN and GAD PEREZ / Globes
Bezeq Telecommunications has announced that it is cutting Internet prices by 50% for subscribers surfing at speeds of 50-100 megabits on its NGN network.
The company said that the lower price for the infrastructure was to make the higher speeds more accessible to more people. 50 megabit speeds will now cost NIS 150 per month, down from NIS 300, and 100 megabit will cost NIS 200 per month, down from NIS 400.
Clal sees mediocre Q2 for Teva
By GUY KATSOVICH / Globes
“We expect another mediocre quarter for Teva Pharmaceutical Industriesm,” says Clal Finance Brokerage. Teva is due to publish its financial report for the second quarter of 2011 on July 27. Clal Finance predicts that the company will post a net profit of $1.08 billion on $4.24 billion revenue.
Clal Finance's forecast is below the market average of a net profit of $1.09 billion on $4.25 billion revenue.
Clal Finance reiterated its "Outperform" recommendation for Teva with a target price of $58, compared with Monday’s closing price on Nasdaq of $47.30, after falling 1.4%, giving a market cap of $44.5 billion. The share price fell 0.7% by mid-afternoon on the TASE today to NIS 163.60.
“We believe that the pressure on Teva's share will increase until the company provides the market information about launches that will help it meet the forecasts' mid-range of $5.05 per share,” says Clal Finance.
Koor reaches new credit deals
By ADI BEN-ISRAEL / Globes
Koor Industries Ltd. has signed new credit lines with Citigroup Inc. and Morgan Stanley, which lent it the money for its purchase of Credit Suisse Group AG shares, due to the drop in the bank's share price. Koor, controlled by Nochi Dankner through IDB Holding Corp. holding company Discount Investment Corporation, may sell some Credit Suisse shares to increase its collateral as part of the deal but it likely to wait until the share price rises.
The core of the agreement is to raise the ratio of the collateral to the value of the Credit Suisse shares on Citigroup and Morgan Stanley have liens. The banks will also lower the floor price of the Credit Suisse shares at which they can compel Koor to sell them immediately, and they raised the interest rate on the loan to LIBOR plus 1.7-2.95% from LIBOR plus 1.7-2.6%.
SolarEdge raises $8m from SVB
By BATYA FELDMAN / Globes
Photovoltaic power optimization developer SolarEdge Technologies has obtained an $8 million credit line from Silicon Valley Bank to finance the company’s working capital requirements and other near-term growth initiatives.
SolarEdge chairman and CEO Guy Sella says that the company has reached tens of millions of dollars in annual sales, and that the new credit line would enable it to continue its rapid growth. He predicts that the company will reach $200 million in sales in 2012. “Nothing has happened to make me think that we won't meet this target,” he said.
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