Israel : Kardan sells East Europe insurance unit to partner for 126m.
Kardan previously reported a capital gain of 20 million on an ownership restructuring at TBIH, and will not report any addition gain following the sale. KFS also owns 90.4% of TBIF Financial Services BV, which provides banking, mortgage, and portfolio management services in Eastern Europe.
KFS founded TBIH in 1998. VIG acquired 40% of KFS in 2006, which it converted a year later into a 60% in TBIH. VIG also obtained an option to acquire the balance of TBIH through December 2011.
At the same time, KFS is buying, for 10 million, from VIG a transferable five-year call option to acquire 92.6% of Bulgarian pension fund Doverie Pension Fund AD, which is owned by TBIH. The exercise price of the option is 150 million for the first three years of the option and 160 million for the last two years. Doverie has 1.3 million members, amounting to a 33% share of the market. It posted a profit of 3.8 million in 12.1 million in 2009, and had total assets of 567million. Kardan said that the option will enable the company to benefit from potential increase in Doverie's value as the global financial markets improve.
Eitan Rechter, one of Kardan's controlling shareholders, said, "We had an option to sell TBIH by the end of 2011, and VIG offered to bring the deal forward. The sale is good for us for two reasons: it lowers the cost of debt repayments, and gives us an option to buy back TBIH's main asset. We're not quitting the banking sector. We'll focus on two core businesses: real estate through Globe Trade Centre SA (WSE:GTC) (GTC Poland), and water infrastructures through Tahal Group International BV. Both sectors have strong potential in the coming years."
Kardan's share price closed at 3.30 in Amsterdam on Friday. The share price rose 1.9% on the TASE today to NIS 1.78 billion.
Copyright : Euclid Infotech Pvt. Ltd.
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|Date:||Jul 26, 2010|
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