Jerusalem, 7 February 1995

CONTROL OF MANAGEMENT SHARE IN ISRAEL CHEMICALS SOLD

(COMMUNICATED BY GPO ECONOMICS DESK)

A 24.9% share, which will grant control over the management of Israel Chemicals (ICL), the largest Government-Owned Concern, has been sold to businessman Shoul Eisenberg’s Israel Corporation and a foreign concern which will be wholly-owned, personally, by Shoul Eisenberg. Eisenberg’s companies will pay $230.325 million for the management share. The sale of these ICL shares is based upon a negotiated value of $920 million for ICL though the market value for the concern at the sale’s closing was $908 million. The sale is conditional upon receiving the approval of both the Knesset Finance Committee’s approval and the Ministry of Industry and Trade’s Supervisor of Cartels and Monopolies.

According to Mr. Yossi (Joseph) Nitzani, head of the Government Companies Authority, this stage of Israel Chemical’s privatization should be completed during the second half of February 1995.

The next stage of ICL’s privatization is scheduled for the end of March 1995, with an international offering of 22% of the concern’s shares. Nitzani said that the shares would be sold on markets in the USA and in Europe with a possible offering in the Far East if market conditions are favorable. Lehman Brothers will be the coordinating underwriters for ICL issues. Nitzani said that in a joint offering, ICL would be offering new shares worth about $ 100 million and the Government, shares worth approximately $ 200 million. Following these offerings, the Government’s holdings in ICL will be reduced to about 28%. Some 25% of ICL’s shares are currently traded on the Tel Aviv Stock Exchange. 4% of ICL’s shares will be sold to its workers at preferential terms, Nitzani reported.

A Golden Share will be created and held by the Government in order to ensure that the new owners of ICL, the Eisenberg companies, are not subject to a takeover by parties hostile to Israel, and to protect the country’s natural resources which the concern’s subsidiaries use.

Israel Chemicals is the owner of the Dead Sea Works, Dead Sea Periclase, Rotem-Amfert Negev, Dead Sea Bromine, Fertilizers and Chemicals, and a number of holdings abroad in Chile, Holland, Germany, and France. Its Dead Sea Works subsidiary is building a plant to produce magnesium near the Dead Sea. The major chemical products produced by ICL’s subsidiaries include potash, magnesium, bromine, and phosphate-based products.