Businessman Shraga Biran has lost control of
Alon Israel Oil Company Ltd. despite last minute attempts to bring a Canadian investor on board. The investor had been due to inject NIS 120 million ($34 million) into Alon but the bondholders insisted on seizing the company's shares in accordance with the terms of the debt settlement signed between the parties last April. The shares were due to change hands today at 1pm.
The bond trustee and bondholder representative today demanded from the mediator Adv. Ruby Bachar to be given full control of Alon Israel because as of midnight yesterday the company had failed to come up with the necessary NIS 120 million. At the same time, Alon Israel and Shraga Biran's representatives asked for an extension beyond the deadline of several days to complete the investment agreement with Canada's Jaguar Resources controlled by Corbin Blume. However, the bondholders opposed extending the deadline.
Alon Israel collapsed under the burden of its debt and in order to fulfil a large debt settlement, it had been required to raise a minimum of NIS 120 million in a share offering by the beginning of October. The offering, which had been due to take place last week was unsuccessful. Nevertheless, sources close to the company hope that a buyer prepared to acquire control of the company through a public offering will appear at the last moment and they are hanging on to the slim possibility that this will happen by the end of the week.
Five months after the debt settlement was reached, the company has been striving to raise NIS 126 million through an offering of NIS 1.05 per share. According to the prospectus, new shares would have formed 60% of its share capital. In addition, under the terms of the debt settlement, the company's bondholders would have received 25% of the shares after the issue. Existing shareholders Shraga Biran and the kibbutz purchasing organizations would have been left with a holding of 13.7%. The remaining 1.3% would have gone to CEO Avi Geffen and chairman Yehoshua (Shuki) Oren. The offering was to be led by Discount Underwriting, headed by Tzahi Sultan.
Alon Israel has undergone many upsets in recent years because of its high leverage and erosion in the value of its assets. The group had to deal with the collapse of retail chain Mega, which led to loss of control of it and of Blue Square Real Estate.
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017 .