Yitzhak Tshuva's high tech empire is continuing its downward path. Green Venture Capital's report published today shows an NIS 81.1 million equity deficit, after a NIS 66.1 million first half loss. Green's investment in Liberate Technologies (Nasdaq: LBRT) cost it NIS 49.2 million in financing expenses in the first half of 2001. Green's woes also include NIS 25.3 million in short term credit, which it is unable to repay.
In the section on its business situation, the company writes, "The company depends on financing from its owner. If the owner does not provide the company with financing, there is no guarantee the company will be able to continue developing its business." In short, Green now says that in the event that Tshuva does not give it cash to resuscitate its operations, the high-tech empire he built will face collapse.
Despite the severe warning, Green, which shelters several TASE-listed venture capital funds, is currently trying to portray its situation in a slightly optimistic light. The company says, "According to management's assessment, and judging by past experience, the controlling shareholder will put up the money to enable the company to meet its obligations."
Company second quarter revenue was only NIS 1 million, all from management fees, compared with NIS 15.8 million in the corresponding quarter last year. The company allowed NIS 5.1 million for the decline in the value of its investments, compared with NIS 14.3 million in the second quarter of 2001. The company attributes the allowance to excess cost on its investments of NIS 5.1 million in Alvarion (Nasdaq: ALVR), NIS 528,000 in Guardian On Board, and NIS 328,000 in Correlate.
Green's quarterly loss amounted to NIS 35.2 million, compared with NIS 32.8 million in the corresponding quarter last year. Financing expenses totaled NIS 17.6 million in the quarter and NIS 49.2 million in the first half of the year. Of this sum, NIS 3.87 million was a write-down for Liberate.
Green owes the banks NIS 341 million, mostly in long-term credit to Bank Leumi. During this period, Green received a NIS 4 million loan from Yitzhak Tshuva.
Green currently operates through a number of TASE-listed venture capital funds that it acquired in recent years. The most prominent is Mofet, which specializes in high-tech investments, in which Green holds 51%. Green also holds 33% of the Marathon Venture Capital Fund, 16% of Sadot Research and Development (LSE: SDT), about 25% of Inventech Investment Co., and 28% of Aura Investments.
Green also owns 34% of Commutech Holdings and Investments, which invests in IT and communications. During the quarter, Commutech signed an agreement with Cellcom, under which Commutech will represent Siemens (NYSE: SI; XETRA: SIE) to Cellcom, and provide it with cellular telephones and accessories. Commutech also has an agreement with Partner Communications (Nasdaq: PTNR). After the quarter ended, Commutech began supplying Cellcom with €3 million worth of Samsung cellular devices.
Finally, Green also holds 28% of Samurai Web Ventures. Samurai deals with e-commerce start-ups. In April, Green signed an agreement with Samurai, under which Green will add its overseas income producing real estate division to Samurai's activity, for which a special subsidiary will be set up.
Published by Globes [online] - www.globes.co.il - on August 28, 2002