Delek Group Ltd. (TASE: DLEKG) has debts of NIS 8 million while in addition controlling shareholder Yitzhak Tshuva has personal debts estimated at NIS 1.5 billion. Tshuva began as a building contractor in Netanya, and although he is best known as an international energy tycoon, he and Delek have major real estate assets in Israel. In recent weeks, Tshuva has begun a clearance sale in a desperate attempt to cover his debts. "Globes" lists what remains to sell and the sale deals that have been agreed.
Delek Group assets
Gas stations and convenience storesDelek Group fully owns Delek Israel through Delek Petroleum, operating 239 gas stations throughout Israel, 56 of which it either owns the land or has a long term lease from the Israel Land Authority. 17 are jointly owned with partners. The company also had 160 Mentha convenience stores as of the end of 2019, 25 of which are operated by franchisees. The company also fully owns the Cup O'Joe cafe chain. There has been interest at a company valuation of NIS 1.2 billion.
NYX Hotel HerzliyaDelek bought the building from Dan Hotels in 2015 and it is today a hotel operated by the Fattal chain. The building is at the corner of Abba Eban and Naomi Shemer Streets. Delek sold 28% of the building to Fattal for NIS 80 million and retains 78% of the building which has 11,000 square meters and three underground parking floors.
Land in Akko: Delek has 117.5 acres of land near the seafront on which there was formerly an electro-chemicals factory. Delek has listed the land as being worth NIS 130 million but a real estate told "Globes" that the land is worth no more than NIS 80-90 million.
Shares in Mehadrin: Delek has an 18% stake in Mehadrin, which owns agricultural land for future real estate development. The shares are currently worth NIS 68 million.
Private assets in Israel and Abroad: In addition to the land in Bavli in Old Tel Aviv that Tshuva has already sold, more than 100 apartments remain to be sold in the two towers already built in the project. Tshuva also retians a 25% stake in Elad Residences, which was sold to JLTV Fund. The stake is worth about NIS 68 million.
Tshuva has far larger holdings overseas, which are more difficult to value. In the US and Canada he operates through the Elad Group. According to BDO Canada, Elad Canada alone is worth between C$ 958 and C$1.07 billion (about NIS 2.7 billion).
In the US, Tshuva's Elad Group operates through Star, which he owns together with Yakir Gabbay. At the end of 2019, Star signed a memorandum of understanding to be sold to a group of investors for NIS 1.85 billion. But Star, which owns 14,000 properties in Florida and elsewhere in the US, has debt of NIS 1.1 billion. However, the sales deal has encountered problems and in the wake of the coronavirus crisis it is unclear if it will be completed.
In Europe, Tshuva operates through Elad Europe, which owns TGE, owned by Tshuva's son Elad. The company has income producing properties and apartments in Germany, Switzerland and the Netherlands, which were worth an estimated NIS 224 million at the end of 2015.
Delek's Assets sold or in the process of being sold
Delek Pi Glilot: At the end of last week Delek signed an agreement with the Ashdod based building contractor and developer Yehiel Abu to sell Delek Pi Glilot for NIS 720 million. Delek Pi Glilot owns land for storing gasoline including 90 acres in Jerusalem, 82.5 acres in Ashdod, 7.75 acres in Haifa and 27 acres in Beersheva.
Cohen Development Gas & Oil: Last month Delek signed an agreement for the sale of its holdings (51.8%) in Cohen Development Gas and Oil Ltd. for NIS 207 million.
Private assets sold or in the process of being sold
Elad Residences: Earlier this month JLTV agreed to pay Tshuva NIS 195 million, for a 70.7% stake valuing the company at NIS 275 million.
Two lots in the Bavli neighborhood Tel Aviv: Last month, Tshuva agreed to sell two lots in the Bavli neighborhood in Old North Tel Aviv to Hagag Group Real Estate Development Ltd. (TASE: HGG) and YH Dimri Construction & Development Ltd. (TASE: DIMRI) for NIS 360 million.
Published by Globes, Israel business news - www.globes-online.com - on May 11, 2020
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