Threat to Israeli pensions after conglomerate profit warning
A mammoth quarterly loss and a going concern warning have raised fears over the future of one of Israel’s largest and most heavily-leveraged corporations.
Under the leadership of Nohi Dankner, one of Israel’s most dynamic businessmen, IDB Holding Corp underwent rapid expansion over the past decade.
But the downturn in Europe and a disastrous investment in Las Vegas real-estate, among other factors, have pushed the corporation into the red.
Last week’s announcement of a NIS 1.3b quarterly loss (£630m) surprised the market only by the scale of losses.
Mr Dankner has said that he is confident that the corporation can survive the crisis, that it has funds to repay loans for at least a year and that none of the investors will lose their money.
Mr Dankner’s acquisitions were backed mainly by pension funds. One banking insider said that “pension funds will certainly take a beating”.