Despite his resounding failure in managing the insolvent Alon Israel Oil Company Ltd. (Alon Group), David Wiessman returns to the limelight, and to the gas station market in which he first grew. Today, Azrieli Group Ltd. (TASE: AZRG) announced the completion of the deal to sell energy company Sonol Israel Ltd. to Wiessman "without significant changes" in the terms originally stated. This takes place despite Dan Public Transportation Co. Ltd., which Wiessman hoped would join him in this deal, deciding not to participate. Wiessman is now expected to look for other partners in this deal.
In the past few years, Azrieli Group has been trying to sell Sonol, which is not a core business for Azrieli, to several entities, in unsuccessful attempts. The group, managed by CEO Yuval Bronstein, says that "Upon deal completion, the buyer (limited partnership, with the general partner controlled by Wiessman) paid most of the compensation required at the time the deal is completed and will pay the remaining sum that was to be paid upon deal completion in a short span of time."
The deal totals NIS 363.5 million. In April 2016, during the signing of the agreement between the parties, it was decided that NIS 187.5 million of the overall compensation would be paid in cash by Wiessman's partnership, Israel Oil & Gas, upon deal completion, and the rest would be paid in the following manner: NIS 21 million would be paid in cash in 18 months after deal completion; NIS 52.5 million would be reduced from the compensation for dividends provided by Sonol until the deal was completed (as forecasted in April) and additional NIS 5 million would be paid only if Sonol settles certain debts. Furthermore, it was decided that the rest of the sum, NIS 97.5 million, would be paid upon completion using a seller's loan Azrieli will grant Wiessman, "guaranteed by a lien on all sold stocks," with an annual interest of prime rate + 1%.
Antitrust Commissioner approves
As reported in "Globes", on Thursday, Dan Public Transportation, which was to buy half of the Sonol shares, backed down on this deal. The Dan board of directors rejected this deal because, according to Dan Chairman Shmuel Rafaeli, "The company decided to invest in public transportation."
About a month ago, Wiessman received the Antitrust Commissioner's approval for the acquisition of Sonol. Wiessman is no stranger to the filling station market, after he had been CEO of the Alon energy firm (which later turned into Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) ) for years. Wiessman still controls 20% of the privately owned company Bielsol, which controls a 53% stake in Alon Group, the company controlling Dor Alon.
However, in early 2015 Wiessman lost his influence over the operations of the failed group. A dispute with his partner Shraga Biran, who controls Bielsol, forced him to resign from his positions as CEO of Alon Group and CEO of subsidiary (Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) (which controls Dor Alon). Moreover, control over Alon Holdings Blue Square Israel is expected to pass to Moti Ben-Moshe, as part of creditors arrangements, leaving Wiessman with no holdings in Dor Alon.
Published by Globes [online], Israel business news - www.globes-online.com - on July 25, 2016
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