Israel Chemicals and Volkswagen last October injected $32 million into Dead Sea Magnesium through deferred notes, TheMarker has learned.
Israel Chemicals established Dead Sea Magnesium in 1995, and Volkswagen acquired a 35% stake for $35 million. Production at the plant commenced in 1997.
It is estimated that Israel Chemicals and Volkswagen injected capital into the magnesium company according to their respective stakes. Thus, Israel Chemicals, which has a 65% interest, is believed to have invested another $20.8 million, and Volkswagen an additional $11.2 million.
Dead Sea Magnesium produces magnesium for the aluminum industry, and magnesium alloy intended mainly for the automobile industry.
Analysts were surprised by the capital infusion because to date Dead Sea Magnesium's losses were mainly large amortization write-offs on paper.
Israel Chemicals has recently been engaged in massive financing rounds, issuing tradable securities for NIS 200 million, and convertible bonds for NIS 75 million.
Maalot has rated Israel Chemicals' long-term debt (-AA), and its commercial securities A1. According to Maalot, Israel Chemicals invested $400 million in Dead Sea Magnesium as at the first half of 2001.
The market cap of Israel Chemicals comes to NIS 6.2 billion.