Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is selling the land in Ashdod on which a Teva Medical plant is located to income producing real estate company Hiron Trade Investments and Industrial Buildings (TASE: HRON) for NIS 109 million. Hiron's report to the TASE shows that it won a pricing procedure for the sale of the property - a 35.4-dunam (8.85-acre) lot on Haorgim Street in the Ashdod industrial zone. The lot contains a number of one and two-storey buildings with 14,000 square meters of aggregate space and construction rights up to 40%.
According to the report, Hiron paid Teva 30% of the price when the agreement was signed and will pay the remainder by January 1, 2020, on which date the property will be handed over to Hiron. Hiron will give Teva a three-year lease on two dunam (0.5 acres) of the site at NIS 130,000 in monthly rent. Teva will use this area for another of its activities in Ashdod - preparing chemical compounds.
The Teva Medical plant is slated for closure in mid-2019 as part of Teva's comprehensive cost-cutting plan. Teva initially announced that it would try to sell the plant, which does not make a profit and is not part of its core business. After failing to find a buyer, however, Teva announced nine months ago that it would close it down and lay off half of the employees there immediately and half when the plant was finally closed. The plant produces IV products. Teva will continue marketing the products, but will import them, instead of producing them by itself.
Hiron's market cap is NIS 774 million. The company deals in income-producing real estate and imports and markets wood. Hiron said that it financed the purchase of the property by increasing its line of credit, but had not yet formulated a plan for using the property.
Published by Globes, Israel business news - en.globes.co.il - on January 31, 2019
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