Shapir Engineering and Industry and its partner, Yehuda Steel, have won the auction for acquiring the activity of Packer Construction Iron Ltd., which is in a crisis. An announcement yesterday by Shapir Engineering indicates that the two acquiring companies agreed to pay NIS 16.4 million for Packer Construction Iron's activity, plus NIS 67 million for its inventory and customers, making a total of NIS 83 million. The price will be adjusted to the level of inventory and list of customers when the deal is completed.
Adv. Ofer Shapira and Adv. Gil Oren, whom the Beer Sheva District Court appointed as the receivers for Africa Israel Industries and the trustees for Packer Steel, ran the auction. The trustees notified the court today of their preparations for the auction and its results.
The trustees announcement shows that two binding bids were submitted for acquiring the assets and activity of Packer Construction Iron. Shapir Engineering and Yehuda Steel bid NIS 61.5 million and Hod Assaf Industries, a TASE-listed company that manufactures, processes, and trades in metal products, bid NIS 86.9 million.
A pricing procedure was then conducted, in which the two bidders were asked to improve their bids. After a number of rounds, the bidders were asked to submit their final bids. Shapira and Oren selected the bid by Shapir Engineering and Yehuda Steel, which they said reflected NIS 89 million in estimated proceeds, according to the values of Packer Construction Iron's inventory and customers' debts as of March 21, 2019.
Completion of the deal is contingent on approval by the court and the Israel Competition Authority (formerly the Antitrust Authority) director general. At the same time, the trustees stated in the announcement that they believed that in this case, the Competition Authority director general would approve the agreement between the parties.
Packer Construction Iron processes metal for concrete reinforcement of infrastructure and buildings, manufactures welded gratings, and produces welded steel poles and cages for supporting and reinforcing buildings. It's factories are located in Be'er Tuvia and Rishon Lezion. The company has 180 employees.
Packer Construction Iron, formerly called Jacoby Iron Concrete, changed its name after being acquired eight years ago by Africa Israel Industries, managed at the time by Avraham Novogrocki. The acquisition was aimed at supplementing the activity of Packer Plada, also owned by Africa Israel Industries.
In that deal, Africa Israel Industries paid NIS 91 million for the activity of Jacoby Iron Concrete, plus NIS 41 million for its inventory - a total of NIS 132 million. The acquired company's business deteriorated later, and it is now in a state of bankruptcy.
In view of the dire state of Packer Construction Iron, the court last February appointed Shapira and Oren as its trustees and approved a plan for operating the company for 45 days under a stay of proceedings against it in order to facilitate a quick sale. Africa Israel Industries also went bankrupt at the same time, following the collapse of Negev Ceramics, another of its subsidiaries.
Shapira and Oren were appointed receivers for Africa Israel Industries last July at the request of Bank Leumi and Bank Hapoalim, to which the company owed NIS 236 million, while also having NIS 180 million in unsecured debts to financial institutions. These creditors will try to obtain the money owned them by selling Packer Plada, which was valued at NIS 663 million at the end of 2017 by Tavor Economic Consultants, controlled by Michael Tavor. Whether the acquisition bids that the receivers obtain for Packer Plada will reach this sum, however, is open to question.
Published by Globes, Israel business news - en.globes.co.il - on April 4, 2019
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