Israel-Canada raises NIS 100m from Israeli institutions

Barak Rosen and Assaf Tuchmeir

The allocation to Menorah, Psagot, Israel Phoenix, Safra, and Noked Capital is at a 6% discount.

Israeli investment institutions recognize the potential of real estate company Israel Canada ITR) Ltd. (TASE:ISCN), controlled by Barak Rosen and Assaf Tuchmeir, and are investing NIS 100 million in a private placement amounting to 14% of the company's capital. The allocation will be at NIS 3.45 per share, reflecting a 4.5% discount on the share's value on the allocation date and a NIS 755 million value for Israel Canada. The institutions taking part in the offering are Menorah Mivtachim Holdings Ltd. (TASE: MORA), which is already a party at interest in Israel Canada; Psagot Investment House Ltd.; The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5); the Safra group; and the Noked Capital fund. Barak Capital Underwriting handled the private placement for the company.

Israel Canada will allocate 11.5% of its capital to the four institutions that are not parties at interest in it. The agreement with Menorah includes an allocation of 1% of Israel Canada's capital and an option to buy an additional 1% of the shares of Tuchmeir and Rosen at a NIS 4.30 per share exercise price, 18% above the current share price. The options are valid for two and a half years from the date on which they were granted. Menorah last month invested over NIS 30 million in Israel Canada's shares in an off-floor transaction. About NIS 20 million of this was paid to Rosen and Tuchmeir.

The share soared over 400% in three years

Before the current offering, Rosen and Tuchmeir's stake in Israel Canada was 31% with a current value of NIS 235 million. Menorah's stake was 9% with a value of nearly NIS 70 million. Another party at interest in the company is Avraham Ben David Ohayon, with 14%, worth NIS 105 million. Israel Canada's share price has risen 10% since the beginning of the year, and has zoomed over 400% in the past three years.

Most of Israel Canada's activity is concentrated in residential projects and management of buyers' groups in the greater Tel Aviv area. In recent years, it has been one of the most prominent companies in this sector. Its buyers' groups projects include the Da Vinci and 17 Rothschild Boulevard projects in central Tel Aviv.

Israel Canada's profit plummeted over 80% to NIS 14 million in the first half of 2017, following a 75% decline in revenue from sales of housing units and commercial space in its projects. The company's shareholders' equity was NIS 370 million, and it had NIS 118 million in cash.

Published by Globes [online], Israel Business News - - on November 13, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Barak Rosen and Assaf Tuchmeir
Barak Rosen and Assaf Tuchmeir
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