Alon Group, which last October passed to the ownership of its institutional bondholders, continues to realize assets in order to meet the debt on its bonds. Sources inform "Globes" that in the past two weeks Alon Goup took advantage of a further spike in the share price of Delek US Holdings (NYSE: DK) in order to sell its remaining stake in the company for over $200 million (NIS 700 million).
The holding in Delek US, which operates oil refineries in the US, was until recently one of Alon Group's main assets, but a 70% rise in its share price in the past year made it worth selling to repay debt.
The first sale took place three months ago when Alon Group sold two million shares in Delek US Holdings to the company itself for some $75 million, at $37.64 per share. Delek US Holdings' share price continued to rise, reaching a $42-45 range last week. Alon Group sold its remaining stake despite the prospect that Delek US will continued to climb because of an improvement in its business. This time too, some of the shares were sold to Delek US Holdings itself.
Alon Group is a private holding company that over a decade ago made a private placement of bonds to investment institutions in a series that over the years grew to NIS 2 billion. A few years ago, the company got into financial difficulties, and, as mentioned, last October it was taken over by the bondholders, after the previous controlling shareholders, Shraga Biran and the buying organization of the kibbutzim, failed in their attempt to raise capital of NIS 120 million for the company. The company continued to be managed by CEO Avi Geffen, who was appointed a year ago by the previous owners.
Alon Group still has a debt of NIS 890 million to its bondholders. Two days ago they were paid NIS 206 million, but that sum apparently does not include the proceeds of the current sale of Delek US shares. Today, Alon Group is due to receive a NIS 40 million dividend from 79.6% owned subsidiary Alon Gas, which owns 4% of the rights in the Tamar gas reservoir and has a market cap on the Tel Aviv Stock Exchange of NIS 630 million. Alon Group's other holding is 29% of the company that operates Road 6 and the Carmel Tunnels.
Published by Globes [online], Israel business news - www.globes-online.com - on April 17, 2018
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