On its fourth quarter balance sheet, Koor Industries Ltd. (NYSE: KOR; TASE: KOR) will make a provision to lower the value of its investment in Credit Suisse (NYSE: CS; SWX: CSGN; XETRA: CSGZ) by NIS 246 million.
Koor owns about 3.4% of the shares in the Swiss banking giant.
Koor lists its Credit Suisse stake on its balance sheet as "available for sale", which means it has to be marked to market, despite Koor's description of the investment as strategic, implying a long term holding. Koor will reduce its balance of capital reserves arising from securities available for sale by NIS 246 million.
Koor will also announce whether the valuation of its Credit Suisse stake is based on the price of its NYSE-traded shares or its Swiss stock exchange-traded shares. Koor's accountants advised it to use the NYSE closing price as of December 31, 2008, which was $28.26.
Koor first invested in Credit Suisse in July 2008, at an average price of $46 per share, and has bought and sold shares in the company several times since then. Despite the lower valuation, Koor is expected to report a quarterly profit of NIS 40 million from its trades in Credit Suisse shares.
Koor is a subsidiary of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) held through Discount Investment Corporation (TASE: DISI).
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2009
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