Elco, Leumi Partners in talks to buy Delek Israel


Yitzhak Tshuva is selling off assets to meet Delek Group's $8 billion debts. Delek Israel's gas station chain has a company valuation of NIS 1.2 billion.

Elco Holdings Ltd. (TASE: ELCO) and Leumi Partners are in talks to buy gas station chain Delek Israel Fuel Corporation from Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, a source close to the deal has told "Globes." Elco is controlled by Danny and Mickey Salkind and Leumi Partners is the investment arm of Bank Leumi (TASE: LUMI). There are also other buyers interested in Delek Israel, which stores and supplies fuel and lubricants and operates one of Israel's biggest gas station and convenience store chains, and has a company valuation of NIS 1.2 billion. 

Delek Israel is one of the Delek Group's main assets. However, Delek Group is required to sell the gas station chain to meet debts of about NIS 8 billion (of which NIS 6 billion is to bondholders). Delek Israel's products are sold at 239 gas stations throughout Israel (178 are independently owned) and 196 Menta convenience stores (of which 160 are independently owned).

Delek Israel has equity of about NIS 1.2 billion and between January and September 2019 had revenue of NIS 3.75 billion and net profit of NIS 78 million. In 2018, Delek Israel had rervenue of NIS 5 billion and net profit of NIS 70 million.

Elco is a holding company with three main publicly traded subsidiaries - building and infrastructure contractor Electra Ltd. (TASE: ELTR), Electra Consumer Products (TASE: ELEK) and income producing property company Electra Real Estate Ltd. (TASE:ELCRE).

In November 2019, Elco expanded its area of operations by acquiring Supergas for NIS 817 million from Azrieli Group Ltd. (TASE: AZRG) - an energy activity with synergy to Delek Israel's operations. Supergas imports, stores and markets compressed natural gas and other gas products to household and institutional customers. Elco also operates a chain of 10 Globus Max cinemas around Israel.

Most of Elco's activities have not been hit by the coronavirus crisis, and its share price has not fallen substantially over the past weeks, after rising 70% in 2019. Elco has a market cap of NIS 3.5 billion.

Published by Globes, Israel business news - www.globes-online.com - on April 13, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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