Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is preparing to close down its two factories in Jerusalem, a tablets factory and an inhalers factory, and is selling the properties in two separate deals for NIS 278 million.
The property on which the tablets factory is located is being sold to Levinstein Properties Ltd. (TASE: LVPR) for NIS 171 million, while the property on which the inhalers factory operates is being sold to Vitania (TASE: VTNA) for NIS 107 million. The two buyers reported the deals to the TASE today. Teva rents from Vitania its headquarters building in Ramat Hahayal in Tel Aviv, to which it will soon move.
Teva recently also sold the property in Ashdod on which Teva Medical operated to Hiron Ltd. (TASE: HRON) for NIS 109 million. Teva is selling these plants as part of the streamlining plan unveiled by CEO Kare Schultz in late 2017 to enable the company to meet its debt payments.
Under the same plan, Teva recently sold its Migada plant in Kiryat Shmona to FIMI Opportunity Funds, led by Ishay Davidi, for $47.5 million. In this case, in contrast to the sites in Jerusalem and Ashdod, the business activity will continue under the plant's new owners, and the sale involved more than just real estate.
Vitania plans to increase the space for construction
The property on which the tablets factory is located covers 31,000 square meters and has 34,000 square meters in built up space, plus 70,000 square meters in available construction rights. Completion of the deal is scheduled for June 2020, subject to approval by Teva's board of directors.
Levinstein Properties, which has a NIS 945 million market cap, today announced its acquisition of the property, together with Meshulam Levinstein Contracting and Engineering (TASE: LEVI), which has a NIS 476 million market cap. Mesulam Levinstein, which controls Levinstein Properties with a 69.8% stake, will own 40% of the property, while Levinstein Properties will own 60%. Levinstein Properties said that it planned to lease the property for various uses, which is the prevailing practice in the area. The company said that it also planned to exercise the additional construction rights in the property, consisting of 32,000 square meters of main and service space and 38,000 square meters of underground service space.
"Acquiring the property on Har Hotzvim diversifies the group's excellent portfolio of properties and the fields of business of its tenants. It is part of the group's strategy for increasing its revenue, dispersal, and field of activity in high-demand areas," said Meshulam Levinstein CEO and controlling shareholder Shaul Lotan. "The built-up space and additional construction rights, combined with the group's engineering and development capabilities, will generate high revenue from the site."
Shortly after these deals, Vitania announced its purchase a 27,700-square meter site on Hamarpe Street in Jerusalem containing buildings with 14,700 square meters in space. Vitania announced that it would pay the capitalization fees required for extending the lease from Israel Land Authority and the costs, if any, of purifying the land.
Vitania will pay Teva 10% of the price, subject to signing the capitalization leasing agreement, and the balance when the property is delivered in July 2020. Vitania will make the first payment from its own resources and will use external financing for the second part. Vitania plans to increase the area for construction.
Published by Globes, Israel business news - en.globes.co.il - on March 20, 2019
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