Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, has signed an agreement to sell its remaining 66% stake in US company Republic Insurance for $140 million (about NIS 540 million).
The buyer of Texas company Republic insurance is US insurance company AmTrust Financial Services, Inc. (Nasdaq:AFSI), which will also acquire the 34% stake held by other US shareholders.
The purchase price will be a combination of $113 million in upfront cash, a $105 million note issued by AmTrust to Delek Group Ltd bearing annual interest of 5.75% with a four year maturity, and cash payments to be made over five years. Pending regulatory approval, the parties anticipate closing will occur during the first half of 2016.
Delek, which formerly owned 100% of Republic, received NIS 310 million several months ago for its 34% stake. Thus when the deal is completed, Delek would have received NIS 860 million for the sale of Republic, which will be recorded as capital gains in the Israeli company's financial report.
Delek Group CEO Asi Bartfeld said, "This deal is another stage in the Group's strategy of focusing on the energy sector, and selling assets not in our core operations. Completing the deal will increase even more the cash in the company's coffers and the financing flexibility in a period of opportunity in the international energy field."
Published by Globes [online], Israel business news - www.globes-online.com - on September 29, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015