Delek Glbl Share Discussion Threads

[flying pig] 09/7/2012 12:48

Thanks Kenny
Tunnel and some dim light.....

[kenny] 08/7/2012 08:43

At long last, a firm deal with the bondholders. I assume this clears the way for DGRE to recommence dividends/buybacks and property sales:

Delek RE bondholders to suffer 60% loss
Parties agree to deal that will see controlling shareholder Yitzhak Tshuva inject new funds into the firm over time.
By Shelly Appelberg Jul.08, 2012 | 1:22 AM
Delek Real Estate bondholders will be suffering a 60% loss on the NIS 2.15 billion they've lent the company, according to the full details of the deal.

After protracted negotiations, the parties agreed to a deal that will see controlling shareholder Yitzhak Tshuva inject new funds into the firm over a number of years.

Under the arrangement, Delek Real Estate will issue two new bond series. The first, known as Kaf Vav in Hebrew, will reach NIS 875 million secured by assets of Elad Israel Residential and Delek Global Real Estate. The series will bear annual interest of 2%, beginning two months after court approval for the series, but this sum will only be paid three years after the deal is sealed.

In return for the delay in payment, Kaf Vav bondholders will also be paid interest of up to 1.75%. NIS 400 million in bonds from the second series, to be known as Kaf Zayin in Hebrew, will be issued with a third priority lien on the company's major assets and second priority on 8% of Delek Group's shares.

In addition, Tshuva will have a NIS 205 million unlinked bond series issued by a company he controls, which Tshuva will secure with private assets. The deal releases Tshuva from further claims and allows him to offset future court judgments with money he is contributing in the current agreement. The release will not include a class action suit currently pending against the Delek Group and Delek Real Estate.

In the deal, Tshuva receives an escape clause in the event of corporate default in the first 18 months after the agreement is implemented, under which he would be excused from injecting further funds. But he committed to remain Delek Real Estate's controlling shareholder for three years or until he has injected NIS 150 million as part of the deal.

[grollfam] 04/7/2012 07:24

sorry you are right, got confused....

[kenny] 04/7/2012 00:24

Is the Buckingham Gate project off permanently - I though it was just the Kinnard House sale that had fell through?

[grollfam] 03/7/2012 19:12

Deals off... Sadly

[kenny] 03/7/2012 17:23

Incidentally, that is a good profit; if the Buckingham Gate development project actually happens.

[kenny] 02/7/2012 10:24

I think I have stated before; it seems very difficult to do business in Isreal without someone going to court:

Judge bars Delek's Buckingham deal
Decision puts Tshuva unit's debt-repayment plans in jeopardy.
By Shelley Appelberg Jul.02, 2012 | 3:53 AM

As lawyers for Yitzhak Tshuva's Delek Real Estate Group and the bondholders of its Series Heh debt were putting the final touches on a debt settlement, Judge Danya Kareth Meyer threw a wrench in the works by barring Delek from taking part in the so-called Buckingham Gate deal.
Specifically, Kareth Meyer's decision blocked subsidiary Delek Global Real Estate from making the sale. More broadly, the judge made it clear that the restraining order forbidding the company from offloading assets also applies to its subsidiaries and subsidiaries of those subsidiaries, many of which are wavering between restructuring and liquidation.
Delek Real Estate claimed that Israeli law does not apply to DGRE, because its assets, which are worth about NIS 10 billion, lie outside Israel. More than the legal principle involved, the Buckingham Gate project - an office-to-homes conversion project near Buckingham Palace in London - is expected to generate NIS 552 million: critical funds for Delek Real Estate to meet its debt repayments.
Delek's attorneys argued that Buckingham represented one of the two most important sources of cash-flow the company needs to service its debt. Without it, they argued, it is doubtful whether Delek Real Estate would be able to make the payments required by the settlement.
But the judge did not accept the company's position and ruled that the language of Judge Varda Alshech's order not only barred disposing the assets, but also barred the company from acting on its rights to freely conduct business, which unambiguously applied to the Buckingham transaction.
The judge also noted the the parties involved had not been apprised of the risks involved with the project, because no details had been provided about its funding. Without that information, Kareth Meyer said, the transaction exposes creditors to additional risk in a company on the verge of default.
The judge ruled that unless a detailed settlement proposal is presented, she cannot approve the transaction. Kareth Meyer's decision also casts a cloud over the sale of the Acre mall for NIS 63 million, which the company announced several days ago.

[grollfam] 14/6/2012 13:06

NOT GOOD NEWS.......................................


Delek Real Estate's Kinnaird House sale falls through
Last week, the company announced that it had signed a non-binding letter of intent to sell the property for £55 million.
Globes' correspondent 14 Jun 12 11:39


Delek Real Estate Ltd. (TASE: DLKR) today announced that the sale London's Kinnaird House at 1 Pall Mall, has fallen through. Last week, the company announced that it had signed a non-binding letter of intent to sell the property for £55 million.
Delek Real Estate also announced that the lenders to the companies that hold its National Car Parks Ltd. portfolio in the UK are in breach of their financial covenants, after failing to make payments on the loans. The lenders therefore notified the company that they have the right to call in the loans immediately, and that they were reserving the right to do so. Delek Real Estate holds both Kinnaird House and National Car Parks through Delek Global Real Estate Ltd.

Delek Real Estate's share price fell 2.6% in morning trading to NIS 0.15, giving a market cap of NIS 60 million.

Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2012

[tiltonboy] 12/6/2012 13:24

A long wait then!!!

[kenny] 12/6/2012 12:17

tiltonboy,

I think the bank loans on the car parks are due in 2017/18. From memory, I think the swaps may not necessarily match those redemption dates. At least some of them are longer. Therefore, something will have to happen in 2017/18 - unless the swaps are merely carried forward. Of course, what we need is a period of higher interest rates in order for the potential losses on the swaps to reverse enabling the company to sell them without incurring a loss.

[tiltonboy] 12/6/2012 11:34

Kenny,

Thanks for those notes, and hopefully you won't be too far off the mark!

IMO, the key to unlocking shareholder value lies in the unwinding of the interest rate swaps, and that they are allowedto run their course. What is your current analysis on the current position in this regard?

I didn't take part in the last Tender Offer, as I felt the price too low, but I am mindful that I will have an ever increasing share in an illiquid portfolio.

[kenny] 12/6/2012 11:22

Accounts for the quarter 31.03.12 are available. NAV moved from minus 2p to 0p roughly. Earnings are difficult to estimate because although they were 12p for the quarter they were boosted by various one off factors. Mismatch between earnings of 12p and NAV improving by only 2p is explained by the share buyback in February 2012.

Notes to the accounts indicate some positive movement in NAV is likely over the rest of 2012, namely:

1. Recapitalisation of NCP, the tenant, is likely to have a positive effect on NAV. NCP's banks wrote off £500m of debt, £50m was injected as new equity and the entity now has only £150m of debt. This is despite DGRE's rent reducing by 14% on account of 22 car parks which DGRE can take back at no cost – for development. The car parks are to be revalued at 30.06.12 to account for the strengthened tenant covenant
2. One maybe two, German properties to be taken back by the banks therefore releasing loss provisions.
3. Currently DGRE owns 59% of the NCP car parks. As part of the separate deal on the debt attached to the freehold car park, £5.1m needs to be injected. Some shareholders may not put up their share with DGRE putting up part of the shortfall. This will have the effect of increasing its interest in the car park properties to 73%. That looks like a very good deal for DGRE; assuming the value of the car parks does not keep on going down.

Clearly, the deal on 3. above could accrete lots of capital value in future for DGRE.

Turning to income, it is very hard to estimate net quarterly income going forward – because of the one's off's going through the income statement and also because it is not clear if this first quarter takes account of the 14% reduction, £6.5m per annum, in rent from the car parks. However, a guesstimate would be about 12p per annum. Treat that figure with caution as it could be materially incorrect.

[kenny] 07/6/2012 15:38

Another sale. Last valuation £47.4m at 31.12.08 (later individual property valuations not disclosed by the company). Not a bad price, some scope for a divi/buyback?!?!
===============
Delek Real Estate sells UK property for £55m
The company will use £46.2 million of the proceeds to repay the secured loan on London's Kinnaird House.
7 June 12 13:33, Globes' correspondent

Yitzhak Tshuva-controlled Delek Real Estate Ltd. (TASE: DLKR) has sold another property held through Delek Global Real Estate Ltd. - Kinnaird House at 1 Pall Mall in London for £55 million. The company will use £46.2 million of the proceeds to repay the secured loan on the property. The five-storey office building was built in 1923. The sale is due to be closed on July 10, subject to due diligence, and the signing of a binding contract.
Delek Real Estate's share price rose 0.6% by mid-afternoon to NIS 0.16, giving a market cap of NIS 62 million.

[kenny] 13/5/2012 17:37

Great! Maybe we will now get a dividend or buyback soon. Seems like a long time since the last, especially after last year's torrent of them.

[kenny] 03/5/2012 12:12

Court appoints receiver for Delek Real Estate

Judge Varda Alshech appointed a receiver from May 13 and urged Yitzhak Tshuva to reach a creditors agreement before then.
3 May 12 12:37, Avi Shauly

Tel Aviv District Court Judge Varda Alshech has decided to appoint a temporary receiver for Delek Real Estate Ltd. (TASE: DLKR from Sunday May 13. Until then, she said, "The parties have a last opportunity to try and bridge the difference between them."

Alshech called on Delek Real Estate controlling shareholder Yitzhak Tshuva to make a "worthy personal contribution" in additional securities and offers that will be acceptable for most of the creditors. She added, "It would be good if the controlling shareholder did not realize his threat to stop financing the company's activities."

She appointed Chagai Ulman as temporary receiver and by the court order he is entitled to undertake a comprehensive investigation into the circumstances that led to the company's collapse and insolvency. By law he is permitted to seize, maintain and if necessary manage the company's assets.
Published by Globes, Israel business news - www.globes-online.com - on May 3, 2012

[grollfam] 01/5/2012 07:02

Court to press Delek RE, bondholders today

Tel Aviv District Court Judge Varda Alshech will give the two sides wrestling over the fate of NIS 2.15 billion in debt owed to bondholders by Yitzhak Tshuva's Delek Real Estate one more chance to reach a compromise. She will pressure the sides to accept an agreement they had earlier agreed to. Failing that, she may appoint a temporary receiver for the company. Alshech's decision came after lawyers representing the holders of three series of Delek bonds told the court they were disappointed over how Tshuva was conducting the negotiations, in particular that he was pulling back from an earlier understanding he would inject NIS 1 billion into the company. (Michael Rochvarger )

[kenny] 24/4/2012 10:21

Bondholders making additional demands even after signing an agreement in principle. I think I said it previously - it must be very difficult to do business in Isreal.
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Tshuva: No more cash for Delek Real Estate
Yitzhak Tshuva has notified the company that he will stop supporting it financially from May 6.
24 April 12 09:38, Avi Shauly

Yitzhak Tshuva yesterday notified Delek Real Estate Ltd. (TASE: DLKR) that he will cease to support the company from May 6, after the company's bondholders kept on making new demands, even after signing an agreement in principle for a debt settlement and Tshuva made concessions to their position. Tshuva sent the letter after last-minute negotiations on a settlement between Delek Real Estate CEO Eran Meital and the bondholder representatives broke down yesterday.
If the bondholders do not quickly reach a deal with Delek Real Estate and Tshuva, the court will reportedly accept the petition of the Series 25 bondholders to liquidate the company.
A source close to Tshuva said, "We've stopping playing games. The bondholders went too far. They've crossed every line with their demands, and the time has come for the court to decide."
Tshuva also sent the letter to the court.
This week, representatives of Delek Real Estate and the bondholders continued to wrangle over the details of a possible debt settlement. "The bondholders' conduct proves that they don't really want a settlement. They don't understand that the company is on borrowed time," said a source close to the company earlier this week, in response to media reports that a deal was near.
That same day, Delek Real Estate stated in response to media reports of an agreement that there was in fact none, and that its possible on liquidation was unchanged.
"The bondholders have chosen liquidation," said another source, summarizing the situation. "The company cannot continue to exist."
Delek Real Estate's share price fell 1% in early trading today to NIS 0.19, giving a market cap of NIS 76 million.
Published by Globes [online]

[kenny] 23/4/2012 15:16

Interesting to note that if a Blackstone fund were to loan DRE money, they would want 40% of the profits from DGRE. Good to have confirmation that an outside party believes their is good value in DGRE.
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Tshuva sweetens the pot for Delek RE bondholders
Offers NIS 60 million more in restructuring deal.
By Shelly Appelberg
Latest update 02:39 23.04.12

The offer now on the table in negotiations between Delek Real Estate and its bondholders calls for Yitzhak Tshuva to pump NIS 60 million more into the company than he committed to before, with bondholders clearing 3% annual interest over the next five years and 3.75% thereafter. Bondholders still insist on 5% but Delek Real Estate has already said Tshuva isn't prepared to throw any more cash into the company.

The overall deal taking shape has Tshuva, the controlling owner, injecting a total of NIS 110 million in the first year and NIS 50 million in each of the following four. If it all works out Delek Real Estate can avoid borrowing from the Blackstone fund at high interest plus some 40% of the profits from its Delek Global Real Estate subsidiary.

A 5-hour negotiating session took place Friday at Harel Financial Group offices, in a bid to agree on a debt settlement to keep Delek Real Estate afloat. Investment managers Amir Hessel, Yoni Tal and Sharon Hinkis attended for representing bondholders Harel, Menora Mivtachim Holdings and Migdal Capital Markets, respectively. Migdal is the largest of the institutional B25 bondholders who applied for Delek Real Estate's liquidation. Counsel for the institutionals did not attend, by prearrangement. Across the table were Tshuva, CEO and board member Eran Meytal and board member Idan Wells.

Tshuva agreed to grant bondholders an upside of 2% to 2.5% in shares of Delek Group, in which he holds the 65% controlling stake, and its extensive natural gas operations, if Delek Group shares surpass NIS 1,000. The are currently trading at around NIS 725. The mechanism would give bondholders 270,000 options, exercisable within four years. By a rough estimate these options are worth NIS 200 million to NIS 250 million, far lower than the NIS 500 million demanded by bondholders recently.

But Tshuva offered to back his commitment to inject NIS 250 million into the company with another hotel he owns in Tiberias, claiming the four hotels owned by Elad Hotels he's putting up as security will completely cover the obligation.

[kenny] 18/4/2012 20:21

Today's Globes market report:

"Delek Real Estate Ltd. (TASE: DLKR) rose 14%, after a meeting with bondholder representatives to try to reach a debt settlement."

[grollfam] 17/4/2012 18:02

Court still wants Delek Real Estate debt settlement


Tel Aviv District Court Judge Varda Alshech has given the sides five days to reach agreement.



The Tel Aviv District Court today asked Delek Real Estate Ltd. (TASE: DLKR and its unsecured creditors to continue talks and attempt to reach an agreed debt settlement within five days. "All's well that ends well," wrote Judge Varda Alshech regarding the conduct of the parties that may result in the liquidation of the real estate company controlled by Yitzhak Tshuva.
Despite her request, the judge said that she did not want to delve too deeply into the details of the debt settlement, insisting that that is not the job of the court.

17 April 12 19:02, Avi Shauly

[kenny] 17/4/2012 10:40

Delek Real Estate officially did not oppose liquidation motion

On Sunday night, Delek Real Estate officially advised the court that it wouldn't oppose a liquidation motion filed by a group of bondholders last week. The investors, holders of the company's B25 series of bonds, may have scored a stunning own goal. They had presumably hoped the company would scale back the partial default it was going to give them. Instead, Delek Real Estate's legal representatives told the court that, in the event of its liquidation, "unsecured creditors will see less than 9% of the debt". Delek Real Estate owes its bondholders of all series NIS 2.15 billion. Holders of the company's B4 and B5 series of bonds, with whom the company reached a debt settlement two months ago, apparently oppose liquidation. Their representatives will decide within days whether to file an urgent motion with the court to hold up the liquidation decision and reopen negotiations with Delek Real Estate and its controlling shareholder, energy and real estate baron Yitzhak Tshuva. The B4 and B5 bondholders' representatives tried hard to arrange a meeting with company representatives during the intermediate days of Passover, Hol HaMo'ed, but to no avail. Meanwhile, the B25 bondholders are firm in their position that the company should be liquidated, even though they stand to lose almost all their money: "The settlement proposal was beneath contempt," one of their representatives said on Monday. (Shelly Appelberg )