Netanyahu Approves Bank Privatization Plan
(Communicated by Finance Ministry Spokesman)
Jerusalem, 27 January 1999
Prime Minister and Finance Minister Benjamin Netanyahu today (Wednesday),
27.1.99, approved the 1999 bank privatization plans jointly submitted by
Accountant-General and M.I. Holdings Chairman Shai Talmon and M.I.
Holdings Director-General Meir Jacobson.
According to Talmon, M.I. Holdings intends to sell the State of Israel's
controlling interests in various banks as a key component of the
privatization program, while also offering block shares for sale to
private and institutional investors in Israel and abroad -- which will
expand the shareholder base, and increase the exposure of the
international financial community to the State of Israel.
Bank Discount
Of the State of Israel's 59% controlling interest in Bank Discount, M.I.
Holdings is negotiating the sale of between 30-53% of the Government's
stake with two interested parties; the remainder will be offered to Bank
Discount employees.
Bank Hapoalim
The State of Israel continues to hold a 24% stake of Bank Hapoalim, with
outstanding options covering 15% thereof -- 7.5% by April 1999, and
another 7.5% by October 1999. Pending the approval of the Knesset Finance
Committee, and subject to market conditions, M.I. Holdings also intends to
sell 7.16% of Bank Hapoalim in the form of expired options from October
1998.
Bank Leumi
State holdings in Bank Leumi, on a fully diluted basis, constitute about
45% of the bank's value -- from which 5% is to be offered to Bank Leumi
employees. At the same time, M.I. Holdings intends to sell 2-4% block
shares, via investment banks, to domestic and foreign investors; this deal
has already received the approval of the Knesset Finance Committee.
Union Bank
The State of Israel owns a 19% stake in Union Bank, which is controlled by
the Eliyahu Group. Negotiations on the sale of the State of Israel's
interest to the Eliyahu Group were recently concluded, and a contract is
now being formulated for the approval of the Knesset Finance Committee.
Bank Mizrachi
The sale of Bank Mizrachi has been completed. The State of Israel's fully
diluted interest in the Bank stands at 1.1%.
1998 State revenues from bank privatization:
| Bank Hapoalim | NIS 669.0 million |
| Bank Leumi | NIS 800.2 million |
| Bank Mizrachi | NIS 718.6 million |
| Bank Hapoalim options | NIS 200.3 million |
| Bank Leumi options | NIS 358.5 million |
| Bank Mizrachi options | NIS 143.5 million |
| Total | NIS 2.891 billion |