Nimrodi in talks to sell Rimonim hotels

Ofer Nimrodi Photo Vardi Kahana PR

The hotels accumulated NIS 14 million in losses in 2016-2017.

Businessperson Ofer Nimrodi is putting ILD Hotels Ltd (Hachsharat Hayishuv Hotels Ltd.) (TASE:HAHO) (Rimonim Hotels) up for sale. Sources inform "Globes" that Nimrodi is negotiating to sell the 83% controlling core in the hotel arm of Israel Land Development Company (TASE: ILDC) to Tiberias-based businessperson Yehezkel Morad.

As far as is known, the price being discussed by Nimrodi and Morad is derived from the ILD Hotels' NIS 100 million market cap, far less than the company's shareholders' NIS 143 million equity, probably because of the company's poor business performance in recent years and its less than satisfactory financial situation.

Following the report in "Globes," Israel Land Development notified the Tel Aviv Stock Exchange (TASE) that it was negotiating the sale of half of its holdings in ILD Hotels at a value of NIS 144 million.

ILD Hotels accumulated NIS 14 million in losses in 2016-2017, while its revenue declined 17% to NIS 242 million in 2017. The company cut its operating loss in half to NIS 5 million, but its net loss remained the same as in 2016: NIS 7 million.

ILD Hotels attributes its loss of revenue to the chain's loss of two hotels for which is management contract expired in 2016, while stating that revenue from the hotels it retained rose by NIS 4 million. The company has eight hotels, three of which it owns completely, one partially, and the other four under a management agreement. The hotels have an aggregate 1,255 rooms.

ILD Hotels also operates a commercial property in Eilat. The company's cash fell 45% in one year to NIS 17 million at the end of 2017. It has NIS 77 million in current liabilities and NIS 63 million in long-term liabilities.

ILD Hotels not complying with TASE rules

The TASE recently announced that ILD Hotels was not meeting the requirement of a minimum holding by the public of 15% for being a listed company (except in cases in which the value of the public's holdings is greater than NIS 15 million). The TASE said that it had given ILD Hotels until the end of the year "to take measures aimed at compliance with the rules." If ILD Hotels does not succeed in rectifying the situation, its shares will probably be put on the watch list.

ILD Hotels' eight hotels are Rimonim Eilat Hotel, Rimonim Galei Kinnereth Hotel in Tiberias, Rimonim Palm Peach in Akko, Ruth Rimonim in Tzfat, Rimonin Tower in Ramat Gan, Rimonim Hermon Holiday Village, Rimonim Hotel Nazareth, and Rimonim Shalom Jerusalem. The chain's occupancy rate in the first quarter of 2018 was 64%, compared with 62% last year.

Morad is a contractor, businessperson, and owner of the Morad Yehezkel earthworks and development company. The company works in infrastructure and has holdings in real estate and hotels. Yehezkel Morad is very familiar with ILD Hotels after buying the Rimonim Galei Kinnereth Hotel from it for NIS 92 million in 2012 (ILD Hotels still manages this hotel). The deal yielded a NIS 40 million profit for ILD Hotels.

In 2009, Morad bought the Tiberias Hot Springs company from Africa-Israel Hotels for NIS 97 million. Tiberias Hot Springs, through which Morad later bought the Rimonim Galei Kinnereth Hotel, operates the Tiberias Hot Springs vacation and health center and the Holiday Inn Hotel in Tiberias.

No response from Israel Development was available.

Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Ofer Nimrodi Photo Vardi Kahana PR
Ofer Nimrodi Photo Vardi Kahana PR
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