Delek Glbl Share Discussion Threads

[grollfam] 25/11/2010 13:06

MORE CLEANING UP OF DRE......


Delek Group buys UK unit from Delek Real Estate

The price tag for the Roadchef deal was ₤86.25 million.

25 November 10 14:0, Koby Yeshayahou

Although Delek Group Ltd. (TASE: DLEKG) sold Delek Real Estate Ltd. (TASE: DLKR) 18 months ago, resulting in Yitzhak Tshuva directly controlling both companies, the financially sound Delek Group continues to come to the aid of financially troubled Delek Real Estate.
Today, Delek Group today acquired Delek Real Estate's 75% stake in UK motorway services company Roadchef Ltd. for ₤86.25 million (NIS 500 million), reflecting a company value of ₤115 million. Delek Group will deduct NIS 380 million from the sale price to offset a loan to Delek Real Estate. The NIS 120 million balance will be paid to directly to Delek Real Estate's creditor bank.

The sale came a month after another Delek Group subsidiary, Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5), again extended repayment of a loan to Delek Real Estate.

Roadchef operates 27 motorway service stations with petrol stations, restaurants, hotels, and convenience stores across the UK.

Delek Real Estate's share price rose 2.1% by mid-afternoon to NIS 1.51, giving a market cap of NIS 449 million. Delek Group's share price rose 1.9% to NIS 979.70, giving a market cap of NIS 11.01 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2010

[grollfam] 11/11/2010 17:19

or a bid or re-listing..........

[kenny] 11/11/2010 16:52

I think it is turkey's all round!!! Medium sized but very glad to have any size.

And I think we can all raise a glass to the fact we held on to our shares and did not sell when they announced the de-listing. Let's hope for more dividends next year, the year after that, the year.....

[flying pig] 11/11/2010 15:59

a few hundred quid is always welcome. Certainly pays for the turkey and a bottle of wine or two. All contributions are gratefully received.

[grollfam] 11/11/2010 15:24


Kenny, medium sized turkey for Chrismas/Hanukkah ????


Delek Global Real Estate plc

("DGRE" or the "Company")

Proposed Interim Dividend

The board of DGRE announces that it resolved in its meeting held earlier today (11th November 2010) to declare an interim dividend of 2.27 pence per DGRE share. The dividend is payable to shareholders on the register at 11th November 2010, and is payable on 25th November 2010 (or as soon as practicable thereafter).

[tiltonboy] 11/11/2010 15:18

Another dividend announced; 2.27p, xd today, payable 25th November.

[grollfam] 07/11/2010 20:43

Well spotted Kenny, no turkey for DRE this year......

[kenny] 07/11/2010 20:14

A small DRE sale.....

Delek Real Estate sells its own offices
The company is continuing the sell-off of properties in order to service its huge debt.
Michal Margalit 7 Nov 10 17:00

Delek Real Estate Ltd. (TASE: DLKR, controlled by Yitzhak Tshuva, is continuing the sell-off of properties in order to service its huge debt. Sources inform ''Globes'' that the company has sold its own offices, also used by subsidiary Elad Israel Ltd., in the Gibor Sport Building in the Ramat Diamond Exchange district, to a private investor for NIS 19.6 million, in a sale and leaseback deal.
Delek Real Estate and Elad Israel will continue to rent the 1,000-square meter premises under a five-year lease, which will reflect a return on the property of 7-7.5%.

The British real estate crisis sent Delek Real Estate into a tailspin, because of the high leverage it and its subsidiaries in that market were bearing. Delek Real Estate has a shareholders' equity deficit of about NIS 1 billion and has NIS 20 million in liabilities.
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2010

[kenny] 04/11/2010 00:13

Great! Maybe I should revert to planning to buy the big turkey this Christmas!!

[grollfam] 03/11/2010 20:53

Another DGRE sale...

Delek Real Estate sells in Switzerland
Delek Global Real Estate sold the office building leased to the University of Zurich.
Globes' correspondent 3 Nov 10 12:11


Delek Real Estate Ltd. (TASE: DLKR is continuing to sell off foreign properties. Subsidiary Delek Global Real Estate plc and its partner sold an office building, leased to the University of Zurich, to a third party for CHF 115 million (NIS 423.3 million).
Delek Real Estate owns 85% of the six-floor 17,425-square meter property, which it books at a value of CHF 120 million (NIS 441.6 million); the property was sold at a discount of 4.1% on the book value.

Delek Global Real Estate will use proceeds from the sale to repay the CHF 104.3 million (NIS 383.8 million) balance of the loan on the property. The company's net cash flow after repaying the loan and other adjustments is CHF 6.6 million (NIS 24.3 million).

Delek Real Estate owns 85% of Delek Global Real Estate. Since taking up office a year ago, Delek Real Estate CEO Eran Meital, has been selling off the company's foreign properties, in line with a strategy disclosed by "Globes" when he took up his post.

Delek Real Estate's share price was flat in morning trading today at NIS 1.70.

Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2010

[grollfam] 03/11/2010 05:18

MORE INFO ON DRE SALE OF ROADCHEF


Delek Group may buy out Roadchef
By Yoram Gabison
After two years of fruitless efforts, Delek Real Estate may finally be
shaking off a millstone around its neck, the British company Roadchef. The
putative buyer: Delek Real Estate's parent company, Yitzhak Tshuva's Delek
Group, in an insider transaction.

Delek Real Estate would sell its 75% stake to Delek Group, which owns the
other 25% already. The price has not been disclosed, but Delek insiders hint
it would involve payment of about NIS 165 million on top of NIS 360 million
that Delek Real Estate owes to its parent, which would be offset. The loan
bears 9.5% interest and is due this December.

Roadchef owes bondholders NIS 1.15 billion (£197 million) as of year-end
2009. Delek Group's shareholders can only hope that Roadchef has assets
worth NIS 1.9 billion, to cover the cost and debt.

The deal will require permission as an insider transaction, which means the
blessing of at least a third of Delek Group's unaffiliated shareholders.

Delek Group and Delek Real Estate mean to obtain external opinions on the
fairness of the deal from three separate appraisers.

Delek Real Estate bought Roadchef for NIS 950 million (£163 million) in
March 2007. Roadchef runs 27 roadside rest stops featuring hotels,
restaurants, stores and gas stations, visited by 60 million people a year,
Delek Group says. Yet that mass of visitors failed to make Roadchef
profitable, possibly because 44% don't actually make any purchases.

In the fourth quarter of 2009, Roadchef lost NIS 269 million.

Roadchef has been managed by an external company that undertook to generate
minimal Ebitda of £30 million a year on average. It undertook to compensate
Roadchef's owner if it missed the target. And miss it did, but no
compensation was forthcoming, culminating in an NIS 87 million writeoff at
year-end 2009.

That agreement was the subject of an Israel Securities Authority
investigation into Delek Real Estate's chief executive at the time, Ilik
Rozanski, who was suspected of misrepresenting the management arrangement
and artificially inflating Roadchef's value by £50 million beyond its fair
value.

Bleeding wound

Delek Real Estate has been trying to sell Roadchef since December 2008, but
nobody would pay the NIS 875 million price tag.

Delek Real Estate has been a bleeding ulcer for Delek: It made vast
investments in British real estate just before the bubble burst. The upshot
was huge loans backed by properties whose value was shrinking.

A year and a half ago, Delek Group distributed Delek Real Estate shares as a
dividend in kind to its own shareholders. At the time, Delek Real Estate had
NIS 14 billion in liabilities. That gave Tshuva himself a 50.8% stake in
Delek Real Estate, Bank Hapoalim 9.7% and Delek Group, 4.9%. The other
shareholders were the general public.

Yet Delek Real Estate remained burdensome. Delek Israel bought NIS 102
million in gas stations from the firm. Phoenix, an insurance company
belonging to Delek, extended loans to Delek Real Estate time and again (NIS
224 million as of year-end 2009 ), in exchange for raising interest rates.

Austerity looms in UK and at Delek Real Estate

Sources near Delek claim Delek Real Estate's Ebitda has been improving this
year. But the timing of the deal is not fortuitous. Ten days ago, the UK
government announced a 19% cut in its budget over four years and warned that
half a million public servants stand to lose their jobs. The retirement age
has been lifted and welfare budgets have been slashed. It seems the economic
pain in Britain will be lasting a long time, which will affect businesses
such as Roadchef.

It seems that Delek Group's acquisition of the company is designed to save
Delek Real Estate from a terrible investment, to spare Tshuva personally
from infusing more money into Delek Real Estate, and to allow Delek Real
Estate to repay its loans to Delek Group. Sources near the group admit Delek
Real Estate isn't likely to do so unless it can get rid of Roadchef.

Failure to meet a payment to Delek Group in late June 2011 could cost Delek
Real Estate a credit rating downgrade. It owes its bondholders NIS 2.3
billion. Tshuva personally averted trouble in May 2010 when he bought NIS 70
million worth of Delek Real Estate bonds to prevent institutional investors
from calling in the money.

"In any case Delek Real Estate's loan would have needed extending. The
alternative was that Delek Real Estate sell Roadchef in a fire sale," Delek
Group CEO Asi Bartfeld said.

He added that at a price of NIS 700 million, Delek Group, which is a
minority shareholder in Roadchef, wasn't prepared to sell its stake: it
preferred to buy the company outright.

"At that price it's an excellent investment that Delek Group can better, as
it did with Delek Benelux," Bartfeld said.

If it's such a great deal, why not sell it to another party? Nobody was
willing to pay £140-150 million for it, Bartfeld said.

[kenny] 01/11/2010 18:50

grollfam, thanks for that.
Based on past experience of announcements of potential deals which never happen, I guess we should not believe this will occur until it is actually a done deal.
If it does occur, not too sure it makes much difference to we DGRE shareholders?

[grollfam] 01/11/2010 10:55

Kenny

Tsuva slowly cleaning up DRE........

Delek in talks to acquire UK co Roadchef
Roadchef is owned by former Delek Group unit Delek Real Estate.
Adi Ben-Israel 1 Nov 10 11:24


Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, is considering acquiring UK motorway services areas Roadchef from Delek Real Estate Ltd. (TASE: DLKR, also controlled by Tshuva, after he acquired Delek Group's controlling interest in the company a couple of years ago.
Delek Group would not pay cash for Roadchef, but write off a NIS 350 million loan granted to Delek Real Estate, which gave Delek Group a lien on 24% of shares in foreign subsidiaries that own Roadchef as collateral.

Delek Group raised the possibility of acquiring Roadchef in the past. In its financial report for the second quarter, published on August 31, Delek Group wrote, "We are examining the possibility of another alternative of acquiring Roadchef by Delek Group, offsetting the balance of loans."

The loan referred to is a NIS 353 million loan by Delek Group to Delek Real Estate. Repayment of the loan was postponed from July 2009 to December 2010 when Delek Real Estate was unable to meet its obligations. Delek Real Estate had a working capital deficit of NIS 2.9 billion at the end of June 2010.

Apparently, negotiations have made progress since then, leading to today's notice to the Tel Aviv Stock Exchange (TASE).

In today's notice to the TASE, Delek Group did not disclose the company value, which it would acquire Roadchef, but market sources believe that if a deal is closed, it will be at the value Roadchef is listed in Delek Real Estate's books: ₤120 million (about NIS 684 million)

In its financial report for the second quarter, Delek Real Estate listed its expected sources of revenue over the coming year, one of which was NIS 346 million from the sale of Roadchef.

Delek Real Estate and wholly-owned Delek Group subsidiary Delek Petroleum Ltd. (TASE: DLKP.B7; DLKP.B8) acquired Roadchef for ₤158 million in 2007. Delek Real Estate's portion was ₤120 million (about 76%).

Delek Real Estate owes about ₤180 million to banks.

Delek Group's share price rose 0.5% in morning trading to NIS 1,006, giving a market cap of NIS 11.5 billion. Delek Real Estate's share price rose 8.4% to NIS 1.82, giving a market cap of NIS 550 million.

Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2010

[grollfam] 25/10/2010 09:50

Thanks Kenny

I see Delek wants to list their gas interests in London. Good for DGRE as they would not want further reputational risk by trying to force out minorities again in DGRE at a ridiculous price

Delek looks to London Stock Exchange offering
Delek Group will try to raise $300 million in January.
Adi Ben-Israel 25 Oct 10 10:20


Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, is planning a public offering on the London Stock Exchange in January 2011. The company's holdings include stakes in the Tamar and Leviathan natural gas discoveries.
Delek Group will try to raise $300 million through an offering of 10% of its shares, reflecting a company value of $3 billion, or NIS 10.8 billion. Delek Group's market cap is NIS 11.48 billion, so the offering will be held at a discount of about 5%.

Delek held the kickoff meeting last week, with Tshuva, Delek Group president and CEO Asaf Bartfeld, and CFO Barak Mashraki, and the underwriters, UBS, Citi, and Deutsche Bank.

Delek Group hopes that a London listing will increase its exposure to large European investors. The timing is good for the company, given the markets' rally since September, as worries about the debt crisis in Europe abate, and given developments in the company's oil leases. Production from Tamar is scheduled to begin in early 2012, and exploratory drilling has begun at Leviathan.

Delek Group has not yet responded to the report.

Delek Group's share price rose 0.8% in early trading to NIS 1,008.

[kenny] 22/10/2010 09:24

I have now worked out that the latest property sale is small in the scheme of things.

A 45% interest in the property gives £31m @ 45% is £13.95m. Assuming debt on that property is the average of 73% on the UK portfolio gives net proceeds of £3.7665m. Divide that by 265.115m shares in issue equals 1.4p per share.

Guess it will have to be a small turkey this Xmas!!

[grollfam] 21/10/2010 16:16

Kenny
Agreed. Do not think Thuva will bid for the minorities while DRE is in poor health.
I think our day in the sun will be when they do a listing in Canada/Europe using the DGRE assets as a core holding. Will not happen soon but think that will be our exit strategy

[kenny] 21/10/2010 15:44

grollfam - as you say, a takeover is unlikely. DRE has no cash and its debts may exceed it assets. Only hope is that Mr Yitzhak Tshuva bids for DRE and he finances DRE to buy out the minorities in DGRE.

Looks like they are going for the alternative of trying to turn Roadchef around - which seems like an impossible task. I am guessing that in the interim, they are going to keep DRE afloat by financing it a) via dividends from DGRE financed by its net rents and property sales and, b) by Yitzhak Tshuva having to put in money to buy out DRE's loan notes as they come up for repayment.

An expensive way of Yitzhak Tshuva saving face but one I think he can afford now that his main company has struck gas. Reports suggest it is a massive gas find and there might be another in the pipeline, if you will excuse the pun!

I am very happy to keep collecting the dividends which, since 2008, are really mounting up.

[grollfam] 21/10/2010 14:44

Thanks Kenny
I too live in hope of an offer from Delek in excess of 3 figures

[kenny] 21/10/2010 14:03

I do not know the current valuation because DGRE does not publish individual property valuations. The only time they did this was for the takeover and as at 31.12.08 it was valued at £32.6m. Since then they have written down property values so it probably sold at near current book value or just below.

As for debt attached to that property, I do not think there is a way of knowing unless it is stated as a post balance sheet event in the quarterly results to 30.09.10 - when issued.

Special dividend – I hope so but I have a feeling that the new MD is going to want to hold some back pending refinancing talks with banks on loans that are coming up for renewal in the near future. However, I am still counting the days until Santa arrives with my Xmas present namely a decent dividend.

[grollfam] 21/10/2010 11:58

KENNY,
What is the book value of this property & the debt held ????

... Maybe a nice special dividend will be paid to us minorities...


Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Global Real Estate Ltd. and its partner Major Belle Ltd. have sold the No. 1 Croydon building in southern London suburb for ₤31 million (NIS 176.7 million). Delek Global Real Estate owned 45% of the office building and Major Belle owned 55%.
In the notice to the Tel Aviv Stock Exchange (TASE), Delek Real Estate said that if the buyers, who were not named, sell the property with 18 months from the closing date, for more than ₤31 million, they will pay the sellers 15% of the additional net proceeds of the sale.

The recently renovated 24-storey 14,995-square meter office building is a landmark in East Croydon. Located near the railway station, it was built in 1970, and its tenants include well-known UK firms.

Yitzhak Tshuva owns 50.76% of Delek Real Estate, which owns 85% of Delek Global Real Estate. Delek Real Estate's share price rose 3.4% in early trading today to NIS 1.66, giving a market cap of NIS 786 million.

[kenny] 12/10/2010 21:22

Thanks grollfam. I guess that Yitzhak Tshuva will have to personally underwrite any bank loan problems DRE has in the interim, while a turn around of RoadChef is attempted.

[tiltonboy] 20/9/2010 16:07

A dividend of 2.26p has been declared, payable on 4th October.

[kenny] 30/8/2010 00:10

grollfam: this fuller article from Globes also talks of an overvaluation in 2008 on the car parks. See after for some figures:

Former Delek Real Estate CEO accused of fraud
The Securities Authority alleges that Ilik Rozansky inflated valuations of UK assets.
Globes' correspondent 29 Aug 10 12:42


The Israel Securities Authority today sent to the Prosecutor for Taxes and Economics the investigative material against former Delek Real Estate Ltd. (TASE: DLKR CEO Ilik Rozanski. He is suspected of submitting a misleading prospectus and financial reports, fraud, and other violations of the criminal code.
The Securities Authority says that the focus of the investigation at Delek Real Estate is on, among other things, the purchase and management of income-producing real estate in several countries through subsidiaries Delek Belron International Ltd. (TASE:DLKI.B1) and Delek Global Real Estate Ltd. Delek Belron owns British motorway services company Roadchef, and also has real estate activity in Israel.

The Securities Authority found that Rozanski, who served as Delek Real Estate's CEO until July 2009, acted to change the accounting classification of Roadchef in Delek Real Estate's books in order to avoid making a NIS 125 million reduction in value in its annual financial report. For this purpose, the Securities Authority claims that Rozanski signed management documents with a third party, which made the accounting reclassification possible.

The investigation was opened in December 2009, a few months before Rozanski left the company. The investigation found that, as part of this agreement, no real transfer of management or risk was actually made by Delek Real Estate to the third party as required by accounting standards. The investigation also found that in order to prevent the write-down, Delek Real Estate and Rozanski misled the Securities Authority and the company's auditor and created false presentations about the management agreement.

The Securities Authority also claims that, in November 2008, amid the global economic crisis and Delek Real Estate's many liabilities and cash flow problems, the company put Roadchef up for sale. The investigation found that, in order to prevent a write-down of Roadchef's value in the financial report, Rozanski falsely told the auditor that one of the bids that Delek Real Estate received for the UK company reflected the expected sale price, albeit only as a preliminary, non-binding offer. Rozanski was involved in this offer, and it was quickly dropped from the agenda.

The Securities Authority claims that the price tag that Rozanski set for Roadchef resulted in a valuation in Delek Real Estate's books that was ₤50 million higher than Roadchef's real value. In a presentation, Rozanski also falsely presented the company's expected cash flow, a critical factor for Delek Real Estate's ability to meet its commitments.

The Securities Authority investigation found that Rozanski acted to raise the value at which it booked the value of British car parks held through a subsidiary of Delek Global Real Estate, National Car Park Ltd., at several hundred million shekels more than their real value, in a deliberate attempt to prevent a large reduction in value in Delek Real Estate's financial report for 2008, greatly affecting the financial report.

The Securities Authority says that, as was the case with Roadchef, Rozanski created a false presentation about a serious offer for National Car Park. The investigation found that there was never any offer for the company, and that Rozanski wrote the offer and the price.

The Securities Authority says that Rozanski gave false statements about the replacement of National Car Park's assessor, and that the real reason for the replacement was to conceal from the auditor and new assessor the low valuation given by the previous assessor.

Rozanski said in response, "The Securities Authority has carried out its duty in the best possible manner and with my full cooperation in discovering the truth and the facts. Regrettably, the findings of the investigation and the facts raised by the Securities Authority's allegations and announcement are unacceptable to me and are incorrect. I am sure that after the prosecutor examines the case, the conclusions will lead to the truth and the closing of the case."

Yitzhak Tshuva owns 50.7% of Delek Real Estate. The company's share price fell 2.8% today to NIS 1.72, giving a market cap of NIS 535 million.

Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2010
=============================
Assuming a worst case and "several hundred million" overvaluation for NCP means, say, NIS 700m overvaluation that knocks £118m of the NAV and brings it down to 83p per share. That is probably as bad as it gets and since 2008 the value of the car parks may have bounced somewhat. Even at 83p per share, I assume that is comfortably above everyone's average price and we also have the dividend stream to fall back on. As I said some time ago, all this shows that DRE is unlikley to remain quoted - it also explains why DGRE traded at such an extreme discount to "announced" NAV.