Israel Corp. Reports Results for Second Quarter of 2019

TEL AVIV, Israel, Aug. 12, 2019 /PRNewswire/ -- Israel Corporation Ltd. (TASE: ILCO) ("IC") announced today its second quarter results for the period ending June 30, 2019.

Debt Balances and Liquidity at the IC Headquarters Level^[2]

As of June 30, 2019, total financial liabilities were $1,315 million, and investments in liquid assets amounted to $254 million.

Net debt as of June 30, 2019 totaled $1,044 million. The net debt includes the collar transaction fair value impact, which decrease the economic value of the financial liabilities in the amount of $4 million. The net debt also includes the fair value of derivatives transactions, which decrease the economic value of the financial liabilities in the amount of $13 million. As of March 31, 2019, the net debt was $1,064m.

The ICL related collar loan balance was $26 million and $40 million as of June 30, 2019 and March 31, 2019 respectively.

Update of Strategy and Change of Office Holders in the Company^[5]

On March 13, 2019, IC announced that its Board of Directors has decided on updating the business strategy of the Company. In alignment with the company's natural purpose, as an active investment company with solid business foundations, the updated strategy of the company will include, besides the purpose to keep maximizing the value of the investments in ICL and Bazan, also to make new investments in accordance with the following guiding principles:

• The Company considers ICL as a strategic investment.
• The investment strategy will be based on the guiding principle of managing a calculated portfolio in a format similar to that of a Private Equity, which combines aside to making investments, also realization of investments in order to maximize value for the shareholders.
• The Company will act in order to implement the investment strategy considering the predicted cash flow and the possible realization of assets and without intention to change the net debt of the company over time.
• The Company intends to allocate aggregate amount of $350-500 million in the next four years in order to make the investments in the new companies.
• The Company will strive to increase value from new investments in companies that have proven a real commercial capability, including products that have been proven in target markets.
• The Company will avoid investing in start-up companies.
• The Company will strive to include as part of its investments a combination between global companies and Israeli technologies.

IC intends to approach the financial debt holders of the Company in order to update the agreements accordingly.

The Board of the Company has instructed the management to submit a comprehensive plan to implement the updated strategy for the Board's approval in the coming months.

About Israel Corporation

IC is a reputable public investment company, which owns and invests in high quality companies with established managements and go-to markets. We strive to generate return on our investment through active board participations and our operational and managerial expertise. Our current core holdings include c.46% stake in Israel Chemicals (NYSE: ICL, TASE: ICL) and a c.33% stake in the Bazan Group (TASE:ORL). IC is publicly traded on the Tel Aviv Stock Exchange under the ticker ILCO and is a TA-35 index constituent.

IC is rated ilA/Stable by Standard & Poor's Maalot.

For further information on IC, see IC's publicly available filings, which can be found on the Tel Aviv Stock Exchange website at http://maya.tase.co.il.

Please also see IC company website http://www.israelcorp.com for additional information.

Convenience Translation

The financial information found in this press release is an English summary based on the original Hebrew financial statements and is solely for the convenience of the reader. The binding version is the original in Hebrew.

Forward Looking Statements

This press release may contain forward-looking statements, which may not materialize and are subject to risks and uncertainties that are not under the control of IC, which may cause actual results to differ materially from those contained in the disclosures.

^[1] During September 2014, IC entered into a financial transaction in relation to 36.2 million shares of ICL. Under its framework, IC will receive protection from a decrease in the price of ICL shares below an average price, which is set at a level of 90% of the US public offering price of ICL, and the counterparties will benefit from an increase in the share price of ICL shares above an average price, which is set at a level of 130% of the US public offering price of ICL.

^[2] Israel Corp and its wholly owned controlled headquarter companies

^[3] c.45.9% on a voting rights basis and c.46.2% on an issued share capital basis.

^[4] Excluding loan and options related to the Collar transaction in an net amount of $22m as of June 30, 2019

^[5] The aforesaid in this report regarding the Company's updated strategy, implementation of the strategy guiding principles, increasing and maximizing value for the shareholders, the estimated scope of investments, the manner of the implementation of the strategy and its format, realization of the assets and investments and/or no changes in the Company's net debt over time, includes forward-looking information, as defined in the Securities Law, 5728-1968, which is based on the intentions, assessments and plans of the Company as of the date of this report only. In practice, the aforesaid my not be executed, in whole or in part, or executed in a different format and a different manner than anticipated or planned, and in this scope, there is no certainty that the net debt of the Company will not increase. The aforesaid is subject, inter alia, to the existence of suitable market conditions, receipt of approvals and/or consents from third parties, conditions relating the portfolio companies, the non-occurrence of risk factors associated with making investments and/or with the Company's activity and its held companies and the actual cash flow. Additionally, the objectives of the above strategy (if implemented), might not be realized, in whole or in part, in the short term or the long term. Without derogating from the generality of the foregoing, in the short-medium term the investment strategy might weigh-in on the Company's results, and there might be an increase in the net debt of the Company in the short and medium term, in connection with the beginning of implementation of the updated strategy. For the full report, please see company immediate report dated March 13th, 2019.     

Investor Relations Contacts

Idan Hizki
Senior Director, Business Development & Investor Relations
Tel: +972-3-684-4500
[email protected]

SOURCE Israel Corporation Ltd