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In 24 other companies, the controlling shareholders are required to sell, merge or delist
their securities from trading by 2019, including 20 share companies whose shares
constitute around 5% of the total value of the stock market. This market condition
presents a commercial opportunity for investment. In this context, we represented
Delek Petroleum in an early redemption of its bonds in accordance with the provisions
set out in the Centralization Law, as well as Nitsba Holdings and Discount Investments
in merger transactions.
Deregulation
In light of the significant extent of the new regulation and the resulting criticism in
recent years, the ISA has initiated new substantial plans for deregulation, most of which
have not yet been enacted and it is not hard to foresee if and when they might come
into force. One of these plans is to provide certain exemptions to companies that list
for trading in Israel, during the first five years of their listing.
Other Trends in the Israeli Capital Market
Offerings on Foreign Stock Exchanges
Many Israeli companies choose to effect initial capital offerings on foreign stock
exchanges, mainly in the U.S. In 2014, 14 Israeli companies made an initial capital
offering to the public in the U.S., as opposed to only 6 companies on the TASE. Our firm
represented underwriters Goldman-Sachs and Merrill Lynch in an initial public offering
of Adama in the U.S., with respect to various aspects of Israeli law that applies to the
company; we have also represented the Delek Group in an offering in London. Both of
these offerings were frozen before completion.
Privatization of Government Companies
Recently, the Government of Israel approved a long-term plan for the privatization of
government companies in 2015-2017. In some of these companies (such as Ashdod
Port, Haifa Port and the Environmental Services Company), a full privatization is
planned. In other government companies, mainly companies with strategic importance
in the field of infrastructure such as Israel Electric Corporation, Mekorot, Israel Railways
and Israel Natural Gas Lines, and security companies such as Israel Aerospace Industries
and Refael, the Government of Israel wishes to retain possession of the controlling
shares and to sell up to 49% of the shares by way of an offering to the public. Our firm
is assisting Ashdod Port in the privatization process and is currently preparing a draft
prospectus for the purpose of an offer for sale and/or an initial public offering (IPO) of
shares of the Ashdod Port by the end of 2015.
Entry of Chinese Investors into Israel
In recent years,there has been a dramatic increase in investments byChinese commercial
entities in Israel. Since the acquisition of 60% of the shares of Adama in consideration
for US$ 1.44 billion in 2011, Chinese companies have been very involved in all areas of
the Israeli economy - ranging from technology and medicine through industry and food
to supervised and sensitive fields, such as finances and national infrastructure. 2014-
2015 were peak years in terms of investments and acquisitions of Israeli companies by
Chinese investors, including the acquisition of 56% of the shares of Tnuva by Chinese
company Bright Food, and the acquisition of the Phoenix Insurance Company by the
Chinese Fosun Capital. This trend is very much expected to continue in the coming
years.