Delek Glbl Share Discussion Threads

[kenny] 15/6/2010 20:00

grollfam, thanks for the information, bad as it is.

I think DGRE is OK because the hotel assets have been written down to nil, which seems to be the correct value, at least at present and perhaps permanently. The car parks are independently valued so hopefully they are correct or thereabouts. The gas stations, which I assume means Roadchef, are directly owned by DRE.

Overall, this is not looking good for DRE to survive as is but on the other hand, despite the ISA investigation, the ISA did recently green light the delayed DRE rights issue, completed a couple of weeks ago.

There is great value in DGRE but it seems to be receding to the horizon. Prospects for early dividend payments are dependant on DGRE selling properties and/or refinancing debt. As for a capital transaction, only hope seems to be for Yitzhak Tshuva to step up and buy DRE followed by DRE buying out DGRE holders for a decent price. However, I do not know if Yitzhak Tshuva has the funds to do this albeit the reputational damage must rule out him floating his Canadian property assets on the Israeli stock market, as was rumoured some weeks ago. Also, to attempt the above, he will no doubt wish to ask the DRE bondholders to take a haircut, and that would not bode well for bond issues by his other companies.

It is a right mess caused by greed and lack of moral fabric. Looks like my retirement will have to be postponed for some years as I do not imagine we are going to recoup value from DGRE for a long time. Hopefully, they will be able to pay some dividends later this year once property sales are acheived.

[grollfam] 15/6/2010 18:36

KENNY, WOULD YOU BUY A USED CAR_PARK FROM THIS MAN ??????


Ilik Rozanski suspected of accounting offenses
The former Delek Real Estate CEO is being investigated for allegedly inflating the book value of properties in the UK.
Stella Korin Lieber, Irit Avissar and Chen Ma'anit 15 Jun 10 19:36


Former Delek Real Estate Ltd. (TASE: DLKR) CEO Ilik (Hillel) Rozanski has been questioned by Israel Securities Authority (ISA) investigators on suspicion that he inflated the value of overseas assets in accounting reports. Delek Real Estate Ltd. is a subsidiary of Delek Group Ltd. (TASE: DLEKG) controlled by Yitzhak Tshuva.
Sources inform "Globes" that Rozanski has been arrested twice in the past six months and released on conditions set by the Tel Aviv Magistrates Court, which include the surrender of his passport. Despite these restrictions, Rozanski has still been allowed to acquire control of Gaon Real Estate Ltd. (TASE: GARE) together with businessman Shlomo Schmeltzer, and Rozanski continues to serve as a consultant to Delek Real state.

The investigation into Rozanski began at the end of 2009 and ISA investigators visited Delek Real Estate's offices in England. Suspicions are focused around the alleged inflation of book values of hotels, car parks and gas stations owned by the company in the UK.

Published by Globes [online], Israel business news - www.globes-online.com - on June 15, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

[kenny] 14/6/2010 15:24

First quarter accounts to 31 March 2010 are available on request from the company - PDF by email - for those that are interested.

Cash is down to £20m at 31 March so I would speculate that we may not get another dividend until some of the properties for sale are actually sold. There is also compulsary purchase orders on three car parks which will yield £59m but it is unclear how much of the sale proceeds will be needed to repay attached debt (perhaps 70%?).

[grollfam] 09/6/2010 12:13

Soon they will be left with 100 dollars in the bank and a few bonds unredeemed.....Plus 85% of DGRE....

[kenny] 09/6/2010 11:56

Another sale:
Delek Real Estate selling Beit Sahar

Delek Real Estate has confirmed that it's sell the office building Beit Sahar, on Yehuda Halevy Street in Tel Aviv, for NIS 22.5 million. The company says it will be using the proceeds to repay banks and won't be booking any significant capital gains or losses on the sale. (TheMarker )

[kenny] 24/5/2010 10:36

Grollfam, thanks for the information. Based on DRE's dire position, I would have thought that DGRE would pay another dividend of 7p, as they have in each of the two previous May's. I am getting a bit impatient for the next dividend but maybe – as indicted in the article - they are waiting to see how much of the right's are taken up albeit I am unsure that makes any sense.

[grollfam] 23/5/2010 16:52

Parent company of DGRE, DRE drops to new 12 month low on TSE while Tsuva plans to float off his private Real EState in separate listings in Canada & USA see following article................

Tshuva preparing to float vast real N. American real estate operations
Last week he filed a prospectus to float Delek USA; now he's looking at the Elad U.S. and Canada companies
By Efrat Neuman
Yitzhak Tshuva is revving his engines for takeoff on the Street. TheMarker has learned that the real estate and energy baron is taking steps to float his giant privately held North American real estate businesses.

Last week the market rustled over his draft prospectus to float one of his companies, Delek USA, at a billion-dollar company value. Based on the prospectus, Delek USA will be raising $230 million at a company value of a billion dollars. But now Tshuva appears to be gearing up to float companies worth roughly more than $3.5 billion.

Tshuva owns massive real estate holdings in the United States and Canada. His U.S. operations are primarily in New York, handled by Elad Properties. His Canadian assets are incorporated under the name Elad Canada.

Among other properties Tshuva owns the Plaza Hotel on Fifth Avenue in Manhattan. He also owns numerous office and apartment buildings, mainly luxury properties in the tri-state area.

For years market mavens have been anticipating that the developer, who began his career as as a builder in Netanya, would float his real estate operations on Wall Street.

If the IPO is successful, Tshuva will hold shares worth $4 billion: about $1 billion dollars in Delek Group (TASE: DLEKG) group and shares in overseas real estate worth $3 billion.

Elad Properties made headlines for buying the Plaza Hotel for $675 million in 2004. Tshuva announced his intention to renovate the Plaza for $350 million so that it would contain 200 luxury apartments and 150 hotel rooms. The plan aroused widespread criticism in New York. Later Tshuva came to a compromise with hotel employees and New York City Hall to preserve the building and reduce the area set aside for residences.

Elad Canada is considered one of the three largest residential real estate companies in Montreal and Toronto.

[grollfam] 18/5/2010 05:51

Delek RE trying to recall ex-CEO's golden parachute
By Michael Rochvarger Company would rather spend money on repaying debt

Delek Real Estate has begun informal talks with its former chief executive officer, Ilik Rozanski, in the hope he'll agree to prematurely terminate the consulting contract signed with him in September 2009.

The company, which belongs to Yitzhak Tshuva's Delek Group, is currently run by Eran Meital.

Informed sources say company officials may have concluded that the sky-high salary Rozanski is receiving for consulting services does not serve Delek Real Estate well, particularly in light of its current need to save every shekel to help it repay the billions of shekels it owes banks and bondholders.

If Rozanski and Delek Real Estate reach an agreement, this will be the end of Rozanski's employment with Tshuva, which began in 1999.

Rozanski served as CEO of Delek Real Estate from 2001-2009. He is now sharing his work hours with Gaon Properties, a publicly-traded shell company he purchased tigether with businessman Shlomo Shmeltzer.

Delek Real Estate's separation from Rozanski, if it happens, will come at the height of an Israel Securities Authority investigation into the company, particularly regarding the way three foreign deals were recorded in its books.

The three deals were the acquisition of a hotels portfolio from the Hilton and Marriott chains; the buyout of MSA, which operates roadside service stations in Britain; and the purchase of Linchfield, which owns 127 parking lots in Britain.

Indefinite advice

In September 2009, Delek Real Estate signed a consulting contract with Rozanski that effectively gave him a half-time position. The contract stated that Rozanski would advise Delek Real Estate indefinitely, and termination of his services would require 12 months' notice. The parties further agreed that neither side would be allowed to give notice during the contract's first year.

Even so, Delek Real Estate is apparently counting on being able to reach an understanding with its former leader. But for now, he continues to work half-time at the company's offices, so any termination agreement will apparently depend on him.

Market players were surprised by the consulting contract's generous terms, which included a monthly salary of NIS 150,000, or NIS 1.8 million a year. Delek Real Estate also agreed to let Rozanski continue driving the company car he used when he was chief executive, and more: it agreed to continue to cover the cost of maintaining the car and to reimburse him for other expenses as long as the consulting contract remains in effect.

In addition, Rozanski received a golden parachute equivalent to 19 monthly salaries, based on his salary cost of NIS 30 million over the previous five years.

No comment was available from Delek Real Estate

[grollfam] 03/5/2010 07:28

TSHUVA backs Delek Real Estate with his wallet

Controlling Delek Real Estate shareholder Yitzhak Tshuva is signaling intent to back the company and help it survive its battle with creditors. After acquiring about 50% of the firm's private Series 2 bonds from institutional investors last week for about NIS 50 million, giving him about 70% of the series, Tshuva is expected to buy the balance of the series for about NIS 20 million. The major institutional investors in the series were Migdal, Menora and Phoenix insurance firms as well as the veteran pension funds.

Through his latest move, Tshuva has removed the threat that bondholders would demand immediate redemption of NIS 73 million in outstanding bond liabilities on the series. The pretext for redemption was created when the Maalot S&P rating agency lowered Delek Real Estate's bond rating three notches to a speculative BB. A meeting of Series 2 bondholders scheduled for Thursday will be only a formality, where bondholders will be updated on recent developments.


The lower bond rating also created a basis for a demand for immediate redemption of NIS 30 million of bonds by Series A bondholders, but this is expected to be forestalled since the company made a bank deposit in that amount. Delek Real Estate is thought to have about NIS 2.2 billion in bond liabilities.

TheMarker has learned that Delek Real Estate has also arrived at an agreement in principle with Mercantile Discount Bank heading off a demand by the bank for immediate repayment of a loan balance of about NIS 65 million. The deal apparently provides the bank with enhanced security on the loan.

Delek Real Estate CEO Eran Meital commented that "the acquisition of the bonds by Tshuva is an additional vote of confidence in the company." A highly-placed capital market source who is close to the Tshuva group said over the weekend that "yet again, Tshuva has proven that there is someone in charge at Delek Real Estate who is conveying the message to investors that he is there, supporting management and not allowing any kind of theoretical concern to harm the company. Tshuva did the right thing and yet again justified the capital markets' confidence in his operations."

[kenny] 01/5/2010 11:30

...or the explanation is that they could not get an outsider to serve on DRE's board as managing director. Hardly likely to be a long term position or a good career move!

[grollfam] 30/4/2010 10:47

likewise...

Interesting to see new MD & Chairman for DGRE are the ELAD Canada heavyweights...

Must have a plan to maybe get DGRE out of DRE.

Tsuva maybe buys the 85% holding & merges with Elad after their listing on TSE ???

[kenny] 30/4/2010 10:27

Interesting that Yitzhak Tshuva has stepped in again to keep DRE afloat. Bodes well for dividends to be paid from DGRE becauase they need the cash in DRE.

We should also see further property sales by DGRE and, maybe, some quite large dividends being paid out - that's what I am dreaming of anyway!

[kenny] 30/4/2010 01:10

Good question - list the shares in Israel, albeit the website is in English. Could it be possible they will relist in London?

On the other hand, DGRE remains tainted by DRE's financial woes so a listing anywhere seems a remote possibility.

[grollfam] 29/4/2010 19:04

KENNY< Why the snazzy new website ?????

[grollfam] 29/4/2010 19:03

Tshuva buys bonds to avoid bondholder demands
A Delek Real Estate rating downgrade could have led to calls for early repayment.
Avi Shauly 29 Apr 10 17:59


Delek Real Estate Ltd. (TASE: DLKR) controlling shareholder Yitzhak Tshuva has successfully neutralized a threat of demands for immediate redemption of the company's Series 2 bond. Sources inform ''Globes'' that, in the past few days, Tshuva bought bonds, boosting his holding in them to about 70%, worth about NIS 50 million. The purchase gives him control at any bondholders meeting.
On Monday, Standard & Poor's Maalot Ltd. downgraded Delek Real Estate's bonds by three grades to BB, junk bond status. The downgrade allows Series 2 bondholders to demand immediate redemption of the bonds, which could have snowballed to two of the company's other bond series, whose size is much greater: NIS 1.8 billion.

In addition to the Series 2 bondholders, Mercantile Discount Bank, to which Delek Real Estate owes NIS 65 million, has the right to demand immediate repayment of the debt.

At the beginning of the week, Tshuva held about 20% of the Series 2 bond, worth NIS 15 million. Over the week, he made a number of purchases from institutional investors at prices close to par, a good deal for all the parties. The institutions got a good price, and Tshuva bought a few more months of quiet.

Delek Real Estate's share price fell 4.7% today to NIS 3.03, giving a market cap of NIS 594 million.

Published by Globes [online], Israel business news - www.globes-online.com - on April 29, 2010

[kenny] 29/4/2010 10:31

Sent the above email to the directors last night, post number 510. Hoping that other shareholers will send a similar email as well. I think it is important because shares in DRE have fallen every day this week, by at least 3% per day, so I do wish to discourage any desperate move to prop up DRE. If the directors know they will face a "class action" if they do anything that is not in the best interests of DGRE, it should discourage them. Many thanks in advance, fellow shareholders.

Today, shares in DRE are down 6.29% so far.

[flying pig] 28/4/2010 12:38

I will add to the voices to the Board!
I believe that they are probably well aware of the issues, but they may get parent company pressure.

[kenny] 28/4/2010 12:28

From DGRE's relaunched website:
======================
Special Advisor
Bob Bowden

Bob was called upon by DGRE to lend his extensive investment experience and knowledge to the company. Bob is a Non-Executive Director at Colliers Capital where he joined as Chairman in January 2008. Bob was previously a senior Partner and Head of Investment at Colliers CRE (then Conrad Ritblat & Co), before joining The British Land Company PLC in April 1992 as Head of property investment and acquisitions. He was appointed an Executive Director in June 1997. Since retiring from British Land in December 2007, Bob has since set up his own property company, Bentinck Estates, to opportunistically invest in UK property.
===============================
I wonder what this special advisor is going to do?? A guess is that he is going to help DGRE to re-finance loans and/or sell assets.

[kenny] 28/4/2010 11:28

I am going to seek reassurances from the directors of DGRE and below is the draft of an email I am proposing to send to as many directors as I can get email addresses for. I am going to send this email this evening and I encourage other shareholders to copy and paste and also send similar or identical emails to all directos. In view of the previous loan, I think we are entitled to seek these reassurances because with DRE's finances worstening since the last loan, it must be clear they cannot repeat this.
===========================================

I am a shareholder in Delek Global Real Estate plc (DGRE) and have read an article at Haaretz.com dated 28 April 2010 indicating that Delek Real Estate (DRE), which owns about 85% of DGRE, is in serious financial trouble.

I wish to receive assurance that DGRE does not currently have and will not, directly or indirectly, make any loan to DRE at any time in the future. I request this assurance in light of a previous loan transaction which I believe contravened the Companies (Jersey) Act 1991.

Under article 74 of the Companies (Jersey) Act 1991 a director, in exercising his duties, is required to:

(a) act honestly and in good faith with a view to the best interests of the company; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

In view of DRE's current reported financial position, including its negative balance sheet and it's requirement to repay bonds over the next two years, it must be clear to any director or person advising a director that it is not in the best interests of DGRE for it to advance any loan to DRE; irrespective of the terms of such loan. The difficult financial position in which DRE currently finds itself is well publicised such that no director at DGRE can claim to be unaware of such financial problems and the rating agency's view that DRE is worthless and that it's bondholders are a) unlikely to receive full repayment and b) DRE has previously sought a compromise with its bondholders. I also note that some directors of DGRE are also directors of DRE.

As a supportive shareholder, I regret having to write in such terms but I trust you will appreciate that I do so in the context of the previous loan transaction. I look forward to receiving the reassurances I seek.

=================================
I really think it would help if the directors received this email from a number of shareholders but please free to amend as you see fit. Please report back on any reply received and I will also do this. Thanks all.

[grollfam] 28/4/2010 08:43

Kenny,
hope you are right....Just worried that the Chairman resigned & has been replaced by a Tshuva insider..Thankfully they(DRE) own 85% of the equity of DGRE & therefore will get most of any cashflow out of DGRE

[kenny] 28/4/2010 08:18

Good points grollfam. I think you can rest easy on the loans to DRE point because the directors would be in breach of their duties if they did that knowing the precarious state of DRE. They could not claim ignorance because of the wealth of information and articles about DRE's financial state.

For example, DRE has recently published its 2009 accounts and they show negative assets, the last bank loan to DRE required the personal guarantee of Mr Tshuva etc. Since delisting, they have only paid dividends, so I do not think they will try that again, there would be such an outcry.

[tiltonboy] 28/4/2010 07:30

and me. Might see if there is any stock around.

[kenny] 28/4/2010 00:30

Highlight from the above article:

"DGRE owns close to 350 properties with an estimated net value of 500 million British pounds, and is considered Delek Real Estate's most prized possession."

I think I have been saying that for a good while now!

Estimated net value of £500m is about 188p per share. I think I would settle for that!!!!!!!!