Despite the recovery in the business of Delek Group (TASE: DLEKG), which he controls, and the considerable improvement in its financial position, Yitzhak Tshuva continues to realize his private holdings in real estate in Israel.
Elad Residence reports that Tshuva has decided to exercise the put option he holds to sell his remaining holding (25%) in the company to the JTLV (Jerusalem Tel Aviv Investments) fund for NIS 68.5 million. The sale reflects a company valuation of NIS 274 million.
Elad Residence, which develops residential, commercial and office projects in Israel, was founded by Tshuva. He put the company up for sale in early 2020, following the financial difficulties encountered by him and Delek Group as a result of the outbreak of the coronavirus pandemic.
At the end of May 2020, Tshuva sold 70.7% of Elad Residence to the JTLV real estate investment fund, owned by Amir Biram, Ariel Rotter, Shlomo Gutman, and Ze'ev Harel, for NIS 198 million, valuing the company at NIS 280 million. This left Tshuva with a 25% stake, the remaining 4.3% being owned by company CEO Ronen Jaffa.
In November 2020, Jaffa bought additional shares in Elad Residence from JTLV for NIS 10.4 million, bringing his stake to 8%, while JTLV's stake fell to 67%. A month later, Elad Residence raised NIS 100 million in a public bond issue, turning it into a reporting company.
Under his agreement with JTLV, Jaffa will buy 2% of Elad Residence out of the shares that JTLV buys under the option, at the same price. After the deal is completed, JTLV will own 90% of Elad Residence, and Jaffa 10%.
Meanwhile, JTLV has become a partner in stock-exchange listed real estate company Duniec Bros. (TASE: DUNI), which is also a residential projects developer. Under a proposal to the Duniec Bros. board in May 2021, Duniec Bros. will buy JTLV's holding in Elad Residence, against an allocation of ordinary shares in Duniec Bros. to the fund. The final structure of the deal remains to be settled in negotiations between the sides, and will require approval by Duniec Bros.' shareholders.
In the first half of 2021, Elad Residence has revenue of NIS 174 million from sales of apartments, which compares with NIS 155 million in the corresponding period of 2020, and posted a net profit of NIS 21 million, which compares with NIS 8 million in the corresponding period.
Published by Globes, Israel business news - en.globes.co.il - on November 1, 2021.
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