Israeli private equity firm Tene Investment Funds, headed by Ariel Halperin, is in negotiations with the controlling shareholder in Haifa Chemicals, Trance Resource Inc., owned by Jules (chairman) and Eddie Trump, on the purchase of a substantial stake in Haifa Chemicals for hundreds of millions of shekels at a valuation of over NIS 1 billion.
Haifa Chemicals produces agricultural fertilizers and industrial chemicals, which it exports to more than 100 countries. The group mainly produces potassium nitrate and various phosphates for specialized fertilizers and for products with a range of applications in industry and in thermos-solar power plants. The raw materials it uses are potash, phosphates, and ammonia (formerly produced in Israel but now imported). Haifa Chemicals was founded in 1966 by the government of Israel, and it operates through sixteen subsidiaries around the world. The group's research and development and its production are located in Israel.
This is not the first time that negotiations have been held over the sale of control of the company. Five years ago, "Globes" revealed that the Trump family was in talks to sell all or part of the company with, among others, a Chinese group of investors, but in the end decided not to part with it.
The Trump family (which has no connection to outgoing US President Donald Trump) made its wealth mainly from real estate and retailing in Europe and the US. It entered into its investment in Haifa Chemicals in 2001 through the purchase of bonds of Trans Resource Inc. owned by Arie Genger, who was close to the late Israeli prime minister Ariel Sharon. "We saw it as financial investment with potential," Jules Trump said in an interview with "Globes" weekend magazine "G", "and then the price of the bonds fell, and Haifa Chemicals was in a bad state at that time, but I liked the idea, it seemed like a good business. We bought the bonds, and later converted them to a 49% stake in the company.
"Genger was very happy. The banks were about to shut down his company, so our purchase and conversion to shares saved it from insolvency. In the following years, until 2008, the company continued to fight for its existence, and several times we had to come to its aid, in the form of money or guarantees to the banks.
"At this stage, the banks very much wanted to eject Genger from the company, and he asked me to come and see how I could help. Genger agreed that if we injected cash to save the company, we would receive a controlling position. The banks too didn't want Genger in the company, but then he changed his mind and turned to the courts."
At the height of the dispute, in 2008, the Trump family managed to persuade Genger's son Sagi to sell the shares he held in Trans Resource (which his father had given him), and thus acquired control of Haifa Chemicals. Genger junior acted against his father, apparently in revenge for having been ousted as CFO of aesthetic medical device company Lumenis, which Genger senior controlled at the time. The Trump family now owns Trans Resource Inc. outright.
Tene Investment Funds was founded in 2004. It is one of Israel's leading private equity firms, specializing in export-oriented industrial companies. It started out investing in kibbutz industries. The firm has over $1 billion under management, and its fourth fund, raised three years ago, amounts to $410 million.
Published by Globes, Israel business news - en.globes.co.il - on January 5, 2021
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