Melisron CEO quits after row with Ofer over loan

Avi Levi

Avi Levy asked for a NIS 225 million loan from Liora Ofer to buy shares in Melisron.

Melisron Ltd. (TASE: MLSR) veteran CEO Avi Levy, today notified the company's board that he is stepping down. Levi began his career in the financial department of the Ofer Group 40 years ago, and has been Melisron CEO for the past 14 years.

In his resignation letter, Levy wrote, "In pursuance of the termination of my position in Melisron Ltd., I want to make the following clear. I never asked for a NIS 400 million loan. Out of belief in the company and its capabilities, and because I wished to continue leading its growth, I asked to buy additional shares in the company for NIS 300 million. I intended to invest NIS 60-75 million of my own money, and I did ask the controlling shareholder, not Melisron, for a NIS 225 million index-linked loan. The loan would have been secured with the purchased shares and my complete personal guarantee, on full recourse terms."

Levy's contract expires on July 20, and he negotiated with Melisron controlling shareholder Liora Ofer on improving the contract terms in recent months. Levy demanded an exceptional loan in the hundreds of millions of shekels for the purpose of buying shares in the company. He currently holds 4.3% of the company's shares, with a market value of NIS 360 million, and wanted to double his holdings.

"Now that I have made things clear, I want to mention a number of milestones and significant events that took place during my period as CEO," Levy continued. "During this period, the company I led, which previously owned a single shopping mall in northern Israel, the Kiryon Mall, became the largest shopping malls company in Israel. In addition to shopping malls, the company manages and holds over 500,000 square meters of offices. A decade ago, during the severe global financial crisis, I led the acquisition of the Ramat Aviv shopping mall, one of the group's more important properties, and since its acquisition, its annual profit has grown from NIS 110 million to NIS 160 million. Two years after that acquisition, I led the acquisition of British-Israel Investments, as a result of which Melisron became the largest shopping malls company in the country."

"During the period when I managed Melisron, the company's market cap rose from less than NIS 2 billion to its current NIS 8.5 billion. The company distributed nearly NIS 2 billion in dividends during this period. The company's FFO, which was NIS 130 million a decade ago, is now NIS 750 million. Thanks to these achievements, Melisron was cited for having the second highest return on the Tel Aviv Stock Exchange for investors (20% in annual terms). After serving for 40 years and growing with the Ofer family, I now end my service at the company with pride," Levy concluded.

The Melisron board of directors is now meeting, and Levy's resignation announcement may have been designed to exert pressure on it to ask him to return on the basis of a compromise between the parties.

Liora Ofer told Melisron's employees, "I want to inform you that after 14 years as CEO, Aviv Levy notified me today that he wanted to resign from the company when his employment agreement expires on July 20, 2019. Avi contributed a great deal to the development and prosperity of the Melisron group, which went from being a small company to being the largest shopping malls company in Israel, owning and managing hundreds of thousands of square meters in shopping, commercial, and office centers. I want to take this opportunity to thank Avi from the bottom of my heart for many years of close friendship, cooperation, accomplishment, and a contribution that made the company what it is today. I wish Avi great success in whatever he chooses to do, and believe that our paths will cross again."

She added that Levy would continue providing his services to the company during the interim, while Melisron selects a new CEO.

Published by Globes, Israel business news - - on July 11, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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