Jackob (Kobi) Maimon, one of Israel's wealthiest businesspeople, is stepping into the spotlight by officially joining the controlling core in YHK General Managers, the controlling shareholder in real estate company Airport City and oil exploration partnership Isramco, which holds 28.75% of the Tamar natural gas reservoir. For many years, Maimon and his associates denied the prevailing belief in the market that he exercised effective control in the group. Maimon's total investment, which will take place in stages and will give him 40% of YHK's shares, will be over NIS 500 million.
YHK is a private partnership that holds a 36.2% controlling interest in Equital, a company listed on the Tel Aviv Stock Exchange (TASE) at a NIS 3.75 billion market cap, and which owns Airport City and Isramco. YHK is currently owned by United Kingsway (74%) and Carmel Asset Management (26%). Carmel is a company owned by the Livnat family, the controlling shareholder in infrastructure company Taavura Holdings. United Kingsway is a foreign company officially controlled by Haim Tsuff, an associate of Maimon. The market nevertheless believed that Maimon really controlled the company. Following the current deal, Maimon can officially join the boards of directors of Equital and its subsidiaries, from which he has hitherto been absent.
According to Equital's report to the TASE, Maimon will initially inject NIS 89.4 million into Equital for 10% of its shares. The investment agreement also includes an allocation of options, full exercise of which will give Maimon 40% of YHK's shares for NIS 545 million, giving YHK a NIS 1.36 billion value, after money.
Maimon's new investment in YHK comes on top of another official direct holding of his in Equital. In August 2018, Maimon reported that he held 5.01% of Equital's shares. In February 2019, however, this holding was diluted to only 3.5%, following completion of the merger between Equital and its subsidiary, JOEL Jerusalem Oil Exploration. This merger meant that Maimon was no longer a party at interest in Equital, and it is unknown whether this investment has changed. At the same time, if no change was made in it, the holding has a current market value of NIS 110 million.
A lot of cash needed to repay bonds
As of now, it is unclear why Maimon chose to become the controlling shareholder in YHK now, after denying his control of the group for years. At the same time, it is known that YHK will need a great deal of cash in the coming years to repay the bonds it issued in early 2018. According to the redemption schedule for the bonds, YHK has to repay NIS 80 million in principal at the end of December 2019, plus NIS 4 million in interest. YHK also has to repay the same amount of principal at the end of 2020, and a final NIS 160 million payment at the end of 2021.
One of Israel's last tycoons
Maimon is regarded as one of Israel's smartest and strongest businesspeople. His name first appeared in the economic news over 20 years ago, when he led an aggressive hostile takeover of oil exploration company Isramco and real estate company JOEL from a financially hard-pressed Yuval Ran. Since that takeover, Maimon has successfully navigated the group's business without getting entangled in an unsuccessful business adventure, an outrageous debt arrangement, a scandalous party at interest deal, or payment of excessive salaries. The group's companies all feature high liquidity and frugal management.
During these years, Maimon also benefited from increased value in real estate deals, and especially gas deals, of the pyramid of companies that he took over. Maimon's control of Isramco, and through it of Tamar, made him one of the last local tycoons, like Yitzhak Tshuva, another gas tycoon. Tsuff, who has fronted the group's business until now, has been a friend of Maimon since their childhood in Petah Tikva.
Published by Globes, Israel business news - en.globes.co.il - on November 26, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019