Electra Consumer Products Ltd. (TASE:ECP) is acquiring Ace Auto Depot Ltd. (TASE:ACDP) for NIS 120 million, a month after the DIY chain obtained a stay of proceedings. Ace's trustees will submit Electra Consumer Products' offer to the Tel Aviv District Court. The offer includes NIS 40 million for the bankrupt retailer's assets, of which NIS 12 million will paid immediately and NIS 28 million will be paid in 24 monthly installments, and NIS 80 million for inventory, which will be paid in 18 monthly installments.
Ace, controlled by B. Gaon Holdings Ltd. (TASE: GAON) and Shlomo Zbeida, owes NIS 450 million, including NIS 241 million to suppliers, NIS 90 million to bondholders, and NIS 85 million to the banks. The sale proceeds will be distributed among the creditors. The size of the write-off they will have to make is not yet known, but the banks will be repaid in full, and the unsecured creditors - the bondholders and suppliers - will get only a fraction of what they are owed.
Electra Consumer Products CEO Yaki Vadmani once served as CEO of Ace. Electra Consumer Products is a subsidiary of Georg (Gershon) Salkind-controlled Elco Holdings Ltd. (TASE: ELCO). It owns retail chains Shekem Electric Ltd., Big Sensor Ltd., and Makhsanei Hashmal Ltd.
Ace's trustees, Adv. Amir Palmer and Boaz Gazit CPA, said in a statement, "This is an excellent deal, which can put Ace back on the right track. Ace can be revived to again become an important factor in the retail market." The company has 51 stores and 1,250 employees, 75% of whom Electra Consumer Products has promised to keep on.
Electra Consumer Products' share price was unchanged today at NIS 32, giving a market cap of NIS 692 million. Ace's share price fell 2.2% to NIS 0.75, giving a market cap of NIS 8 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 20, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012