Finance C'tee allows state 10 months to sell Leumi shares

Rony Hizkiyahu Photo: Tamar Matsafi
Rony Hizkiyahu Photo: Tamar Matsafi

The state's 5.8% holding in Bank Leumi is expected to fetch NIS 2 billion, which will be allocated to reducing the national debt.

The Knesset Finance Committee approved the sale of the state's shares in Bank Leumi (TASE: LUMI) (5.8%) today. The value of the shares is some NIS 2 billion at current prices. Ministry of Finance Accountant General Rony Hizkiyahu said, "The state's holding in Bank Leumi does not represent a controlling interest and is not being sold as such. This is merely a financial investment, and we want to look at selling it." Hizkiyahu added that the state would abide by its commitment to the bank's employees in the sale and would offer them 10% of the shares being sold at a discount of 25% on the market price.

"The procedure is such that we are asking for a period of time, since the stock exchange is built on rumor and speculation. This is intended to prevent guesses as to the time of the sale, so that we can obtain the best possible price without causing upsets at the bank," Hizkiyahu said.

The state requested a year in which to sell the shares, but because of Finance Committee chairman Moshe Gafni's view, which coincides with that of the bank's workers committee, that this was too long a period, it was decided that ten months would be allowed for the process. As mentioned, the expectation is that the sale will yield NIS 2 billion, which will be used to reduce the state's debt, which currently stands at NIS 750 billion, representing 60% of Israel's annual GDP.

"Globes" reported in April that the state was seeking to sell its stake in Bank Leumi, its last remaining holding in the Israeli banking system. The state is expected to hold a competitive auction and to distribute the shares on the market to investors. The Bank of Israel recently relaxed its rules to allow investment institutions to raise their holdings in bank shares to 7.5% of any bank (up from 5% previously), so that the capital market is not expected to have any problem in absorbing the shares.

Published by Globes [online], Israel business news - www.globes-online.com - on July 16, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Rony Hizkiyahu Photo: Tamar Matsafi
Rony Hizkiyahu Photo: Tamar Matsafi
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