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Israel Corp. to invest in east Europe biofuel company

Israel Corp., an Israeli holding company, agreed to pay $132 million for a 49.9% stake in an east European energy-related company, which will use part of the money to start biodiesel production.

The agreement was made in a non-binding memorandum of understanding that will expire if the deal is not completed by March 1, Israel Corp. said in a statement to the Tel Aviv Stock Exchange yesterday. The unidentified company will use some of the funds to expand its current vegetable oil crushing and trading business, Israel Corp. said in the filing. Israel Corp. is seeking to expand its energy investments after being forced to sell its stake in Israel Oil Refineries to the government last year and after talks to buy a stake in Paz Oil Co., the country's third-largest energy company, collapsed in September.

The Tel Aviv-based holding company raised €117.4 million ($150 million) in a bond sale last week to fund new investments and may seek to regain part of Oil Refineries, when the government sells shares of the company to the public early next year. Shares of Israel Corp. fell 13 Israeli shekels, or 0.6%, to close at 2,039 shekels in Tel Aviv. Israel Corp. owns a 52% stake in Israel Chemicals Ltd., which harvests potash and other minerals from the Dead Sea, and 98% of Zim Integrated Shipping Services Ltd., an Israeli operator of container vessels. It also holds a 16% stake in Tower Semiconductor Ltd., a maker of custom computer chips. (Bloomberg)