Nexus Telocation Systems Ltd. (OTCBB: NXTSF), announced today that an investor group led by Gandyr Investments Ltd. have exercised their option to purchase shares in Nexus subsidiary Shagrir Vehicle Services Ltd., at an aggregate purchase price of NIS 29.1 million. At the same time, Shagrir is to repay loans in an amount of NIS 29.1 million.
Gandyr Investments 2004 Ltd. is a company controlled by Dr. Israel Yovel and Judith Yovel Recanati.
In February 2005, Nexus announced that Shagrir Vehicle Services had completed the purchase of Shagrir Towing Services Ltd. and Shagrir (1985) Ltd. for approximately NIS 200 million.
NIS 100 million was funded by Bank Hapoalim (LSE: BKHD; TASE: POLI), NIS 40 million was funded by a loan provided by Shagrir and approximately NIS 50 million was funded by the investor group led by Gandyr Investments Ltd. and Egged Holdings Ltd.
The investor group is now exercising the option to purchase the shares prior to the options' date of expiration which was set for February 28, 2007.
Following the exercise, Nexus is expected to record in its consolidated financial statements of fourth quarter 2005 a capital gain of over $300,000, mainly due to a reduction of approximately $6.2 million in liabilities and realization of approximately $5.8 million of intangible assets.
Nexus will hold approximately 56.56% of the issued share capital of Shagrir and the Gandyr investor group will hold approximately 43.44% of the issued share capital of Shagrir.
Nexus's noted that its financial expenses and amortization of intangible assets are expected to reduce.
Nexus and Shagrir chairman Yossi Ben Shalom said, "The decision of the investors to exercise their right to purchase shares in Shagrir is a vote of confidence in the company and its activities and is a direct result of the improvement of the financial results of the company."
Nexus Telocation Systems is a service provider of a range of services to automobile owners and insurance companies, including road-side assistance, vehicle towing, stolen vehicle retrieval, fleet management and other value added services. Nexus provides services, for the most part, in Israel, through its subsidiary Shagrir and in Argentina and Mexico through its local subsidiaries. Independent operators provide similar services in Russia and Venezuela utilizing Nexus' technology and operational know-how.
Published by Globes [online], Israel business news - www.globes.co.il - on Wednesday, November 30, 2005