Following its poor financial results Israel Chemicals (TASE: ICL: NYSE: ICL, now led by the recently appointed acting CEO Asher Grinbaum, is taking steps to halt enormous planned investments. Sources inform "Globes" that with ICL set to sustain substantial losses in the third quarter of 2016 due to write-offs of huge investments in Israel and abroad, the company is moving forward with plans to sell land in Beersheva bought in 2014. On the land, ICL's new headquarters is scheduled to be built.
After construction is completed, ICL will rent the office space from the buyer in a sale and leaseback deal. The land is comprised of two lots purchased two and a half years ago from the Beersheva municipality for ICL's new headquarters totaling 30,000 square meters.
Selling the land now and renting the complex after construction is complete is expected to help ICL save construction costs worth hundreds of millions of shekels, while freeing up financing.
Sources believe that ICL is in talks with several large income producing real estate firms on the acquisition of the plot and building the offices, including Amot, from the Alony Hetz Property and Investments Ltd. (TASE: ALHE) group.
ICL is expected to report a net loss of hundreds of millions of dollars in the third quarter of 2016, due to significant, one-time write-offs: terminating investment in the Ethiopian potash mine (expected to result in a $170 million investment write off), and cancelling a major ERP computerization project, which could result in a $300-400 million write-off.
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2016
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