Delek Glbl Share Discussion Threads

[grollfam] 01/7/2011 10:10

Kenny

Not unhappy with what has happened...we have had back more than 50p since they tried to buy us out at 50p a share mid 2009 & we will still be in a highly geared vehicle which can pay out 5-10p dividends out of cash flows yearly....

Should DRE not be supported by Yitzhak Tshuva, which is unlikely given the fact that he will want to list his gas interests in London,then anyone buyibg the 85% in DGRE would have to make us minority shareholders a similar offer which we can then consider....

[kenny] 30/6/2011 23:48

Looking past the second buyback, the sole remaining Canadian property has a 2008 valuation of C$91.5m. Assuming same current value and debt of 51%; per the average shown in the 2010 accounts for Canadian property, would yield about £27m.

Not bad, but maybe the third and last buyback as it is not clear what else DGRE has that when sold would produce a decent lump of money. What would then remain is lots of property but all of it highly geared.

DGRE is still likely to be a great higher yielder for years or decades to come – maybe 7p per annum or as much as 10p - but there may not be any more 'corporate action' type transactions until interest rates increase enabling the swaps to be unwound/sold without incurring large losses.

On the other hand, DRE is still in serious financial trouble and next year it has another round of large bond redemptions falling due without any clear source of financing them other than through selling more of DGRE's properties.

Worse case, the 85% of DGRE ends up in the hands of DRE bondholder's hands and they try a fire sale of what is left. That eventuality is likely some way down the road and in any event it seems clear that it is in the bondholders own best financial interests to be patient and await interest rates going up; collecting dividends in the interim.

[grollfam] 30/6/2011 11:03

Amounts to the nett cash from the sale of the 3 Canadian properties....Only low hanging fruit left is the last Canadian property where there is still a lot of equity left....Luckily dgre owns 100% of the property

[tiltonboy] 30/6/2011 10:05

Fantastic news, even given the discount to the last buy-back price.

[kenny] 30/6/2011 09:57

Second Buyback announced:

30 June 2011

Delek Global Real Estate plc ("DGRE" or the "Company")

DGRE approval of exercise of second-tranche buyback


The board of directors of the Company (the "Board") announces that pursuant to an extraordinary general meeting ("EGM") of the Company held on 14 April 2011, by which the Company's shareholders (the "Shareholders") resolved to empower the Board to authorise the purchase by the Company of ordinary shares in its share capital under such general terms as further detailed within the letter from the chairman and the EGM notice dispatched to the Shareholders on 23 March 2011, the Board has resolved to purchase up to 60,000,000 ordinary shares in the share capital of the Company from its Shareholders equivalent to approximately 25.54% of the entire issued share capital of the Company at a price of £1.15 per ordinary share (the "Buyback"). The Buyback is conditional upon receipt of certain funds (the "Funds") by the Company no later than 13 July 2011 (or such later date to be notified by further announcement by the Company) so that if the Funds are not received by such date, the Buyback shall not be carried out.

Full details of the Buyback and the action requirements from the Shareholders may be found in the Buyback documentation dispatched to the Shareholders of the Company today.

[kenny] 26/6/2011 17:24

Delek Real Estate Sells Canadian Assets to Raise Funds to Pay Back Debt

By Gwen Ackerman - Jun 26, 2011

Delek Real Estate Ltd. (DLKR) is one step away from accomplishing its goal of exiting the Canadian market by the end of August, Chief Executive Officer Eran Meytal said.

Delek has been selling Canadian properties since late last year as it works to repay some 1.7 billion shekels ($494 million) of outstanding debt, according to data compiled by Bloomberg. Delek operates primarily in the U.K. and Europe and holds the Canadian assets through Delek Global Real Estate Ltd., which last week announced agreements to sell a property in Quebec and its holdings in 30 shopping centers known as Jean Coutu.

"The market is very strong in Canada and the prices are high so the yields are optimal," CEO Meytal told Bloomberg in a telephone interview on June 23. He declined to comment on the status of the final Canadian property.

High energy prices and low interest rates are helping property prices in Canada to recover and are buoying the country's economy, Ross Moore, director of market and economic research at Seattle-based Colliers International, said in May.

Crude oil closed at $91.16 a barrel on June 24, 19 percent above year-earlier levels. Bank of Canada Governor Mark Carney said June 15 housing prices in some parts of the country are reaching "severely unaffordable" and that the bank plans to "eventually" raise its benchmark rate from 1 percent, where it has stood since September.

Mitigating Declines

The Ramat Gan, Israel-based company's quarterly loss narrowed from 255.4 million shekels in the second quarter of 2010 to 89.5 million shekels in this year's first quarter. Canadian holdings helped mitigate first-quarter declines in the value of the company's property portfolio, it said.

"There are no massive future capital gains to be made," Terence Klingman, analyst at Tel Aviv-based Meitav Investment House Ltd. said by telephone. "They can make reasonable profitability from rental income but they are deleveraging."

The shares of Delek Real Estate have plummetted 82 percent over the past year, compared with a 7 percent gain for the TA-100 index. Gazit Globe Ltd., another Israeli real-estate company with international holdings, rose 22 percent over the same period. RioCan Real Estate Investment Trust (REI-U), Canada's largest real-estate investment trust by market value, rose 36 percent in that period, compared with an 11 percent jump for the S&P/TSX Composite Index.

'Weak Liquidity'

Since Meytal's appointment as chief executive officer in October 2009, the company has sold property in countries including Finland, Canada and Britain to help meet debt obligations. Standard & Poor's Maalot on March 2 cut its credit rating to ilCCC, eight levels below investment grade, from ilBB. The rating agency cited "weak liquidity" and said the company had "no certain resources to pay bond holders" after it cancelled plans to sell a significant property in the U.K.

Delek's controlling shareholder agreed on May 30 to provide guarantees for a 30 million-shekel bank loan so the company could make a payment to bondholders. Isaac Tshuva, who holds more than 50 percent of Delek Real Estate, also has interests in Canada through an 88 percent stake in Elad Canada Inc. (ELCN)
To contact the reporter on this story: Gwen Ackerman @bloomberg.net.

[tiltonboy] 23/6/2011 10:50

Following the recent buy-backs, how many shares are left in issue.

Nice to see an asset sold above book value, and where there is a decent amount of equity. I guess the readily realisable assets are being disposed of. What is the size of the "rump" that we may have to retain, and what are the income generating characteristics of those assets?

[grollfam] 23/6/2011 10:04

Kenny, you beat me to it......

[grollfam] 23/6/2011 10:02

ANOTHER SALE..NETT CASH INFLOW APPROX 14 Million Canadian Dollars....

Delek Real Estate sells Quebec property for C$49m
With this sale, the company has only property left in Canada, an office building at 5001 Yonge Street in Toronto.
Globes' correspondent 23 Jun 11 10:43


Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Global Real Estate plc has sold the Carrefour Trois Rivières commercial center in Quebec for C$49 million (NIS 171.5 million). With this sale, the company has only property left in Canada, an office building at 5001 Yonge Street in Toronto.
Earlier this week, Delek Real Estate sold its Jean Coutu portfolio of 30 malls in Quebec and Ontario for C$119 million, and last month it sold the Bell Tower in Montreal for C$281 million.

The 43,207-square meter Carrefour Trois Rivières commercial center is anchored by Wal-Mart. The balance of the loan on the property is C$35.3 million (NIS 123.5 million. Delek Global Real Estate books the property at a value of $C41.3 million (NIS 144.5 million.) Closing of the sale is subject to due diligence.

Delek Real Estate's share price was unchanged in morning trading at NIS 0.31, giving a market cap of NIS 121 million.

Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2011

[kenny] 23/6/2011 09:53

Another property in Canada has been sold:

Delek Real Estate sells Quebec property for C$49m
With this sale, the company has only property left in Canada, an office building at 5001 Yonge Street in Toronto.
Globes' correspondent 23 Jun 11 10:43

Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Global Real Estate plc has sold the Carrefour Trois Rivières commercial center in Quebec for C$49 million (NIS 171.5 million). With this sale, the company has only property left in Canada, an office building at 5001 Yonge Street in Toronto.
Earlier this week, Delek Real Estate sold its Jean Coutu portfolio of 30 malls in Quebec and Ontario for C$119 million, and last month it sold the Bell Tower in Montreal for C$281 million.

The 43,207-square meter Carrefour Trois Rivières commercial center is anchored by Wal-Mart. The balance of the loan on the property is C$35.3 million (NIS 123.5 million. Delek Global Real Estate books the property at a value of $C41.3 million (NIS 144.5 million.) Closing of the sale is subject to due diligence.

Delek Real Estate's share price was unchanged in morning trading at NIS 0.31, giving a market cap of NIS 121 million.
===================================
Adds about £8m to the growing buyout kitty.

[kenny] 20/6/2011 00:03

Last known valuation was C$113m at 31.12.08 as no individual property values have been released since. May have been marked up very slightly since but mainly by virtue of the C$ improving in £ terms.

Another £12m net for the next buyback - which should occur before the next repayment of bonds due some date in September.

[tiltonboy] 19/6/2011 22:19

Obvious question...but what is it in the books at?

[grollfam] 19/6/2011 10:03

KENNY

We have sold another property in Canada where the market is firm....

Unlike the Bell Tower sale where DGRE had 100% interest, DGRE had a 45% interest in this property....

Delek Real Estate sells 30 Canadian malls for NIS 418m
The 30 shopping centers in Quebec and Ontario are anchored by the Jean Coutu drugstore chain.
Globes' correspondent 19 Jun 11 10:41


Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, has sold its 45% stake in Jean Coutu portfolio of 30 malls in Canada, held through Delek Global Real Estate plc for C$119 million (NIS 418 million). The company did not disclose the name of the buyer.
The 30 shopping centers in Quebec and Ontario are anchored by the Jean Coutu Group Inc. (TSX: PCJ-A; JCOUF.PK) drugstore chain.

The balance of the loan on the portfolio is C$76.4 million (NIS 268 million).

In May, Delek Global Real Estate sold the Bell Tower in Montreal for C$281 million (NIS 1 billion). In January, it sold office building Zurich, Switzerland, for CHF 114.5 million (NIS 422 million), in November 2010, it sold its 75% stake in UK motorway services company Roadchef Ltd. for ₤86.25 million (NIS 500 million) to sister company Delek Group Ltd. (TASE: DLEKG), and in March 2010, it sold its 85% stake in Place Elginresidential project in Montreal for C$47.5 million (NIS 172 million).

Since Eran Meital took over as Delek Real Estate CEO in 2009, he has been selling off the company's foreign properties. Sales to date total NIS 2.5 billion, however the company's consolidated debt is NIS 20 billion. The company has to repay NIS 1.2 billion in bonds by November 2012 and NIS 600 million to the banks. The company's ability to repay is exacerbated by its NIS 4.4 billion working capital deficit and NIS 1 billion shareholders' equity deficit.

Last week, the Royal Bank of Scotland foreclosed on the ₤1 billion Marriott hotels portfolio in the UK, in which Delek Real Estate owns 17%.

Delek Real Estate's share price fell 0.9% in morning trading today to NIS 0.323, giving a market cap of NIS 126 million.

Published by Globes [online], Israel business news - www.globes-online.com - on June 19, 2011

[kenny] 15/6/2011 00:26

Oh dear, it's goodbye to the Marriott Hotels albeit a few months ago they injected some money to rescue their percentage interest in the Hilton portfolio. No effect on NAV as the Marriott portfolio was already written down to nil. Quite a few chickens coming home to roost recently and this may continue to be the case in the next 12 months. Looking on the positive, at least true NAV is becoming a lot clearer. Could be some more property write downs/re-possessions in the next year but I anticipate that may be balanced by an improvement in the swap provisions. Also, bondholders in DRE much be dreading this potentially happening to them.
=================================================================
RBS takes control of 42 Marriott hotels

By Daniel Thomas, Property Correspondent

Published: June 14 2011 20:36 | Last updated: June 14 2011 20:36

Royal Bank of Scotland has taken control of a £1bn property portfolio of Marriott hotels after failing to secure a debt-for-equity restructuring of one of its largest individual real estate loans made during the property boom.

RBS on Tuesday night appointed Ernst & Young as receivers to the portfolio of 42 hotels across the UK, which was acquired in 2007 from the bank for £1.1bn by Igal Ahouvi, Quinlan Private and Delek Real Estate.

RBS owns about £700m of debt that was used to finance the acquisition in a syndicated loan structure. There is also an additional loan originally owned by Lehman Brothers that was subsequently acquired by York Capital, the hedge fund group.

The Marriott portfolio includes 42 four and five-star hotels in England, Scotland and Wales, with about 8,000 rooms, and will be one of the largest single property receiverships so far in the debt book of the bank.

The hotel operations and staff will not be affected by the receivership of the holding company. The hotels, which include the Marriott Country Hall on London's South Bank, are operated by Marriott International under a 30-year management agreement that commenced in 2006.

Ernst & Young will appoint a board of directors to take charge of the properties, which will be chaired by Steve Bodger, a consultant with Alchemy, the private equity group.

It will prepare to sell the portfolio to recover as much of the £900m of debt behind the portfolio as possible. It is hoped that the majority of the debt will be repaid through the sale, according to one source close to the negotiations, although lenders may need to take some writedown on their stakes.

Ernst & Young have been appointed receivers over the offshore holding company called Professional Ventures Corporation, headquartered in the British Virgin Islands.

Ernst & Young confirmed that Alan Bloom and Roy Bailey had been appointed joint administrative receivers.

In a statement, Mr Bailey said: "It is business as usual for the portfolio. Marriott will continue to operate the hotels and this decision will not affect customers, suppliers or employees of the hotels."

RBS had been in talks since 2008 to restructure the debt, which would have seen the bank swap some of its position for ownership of equity.

These talks ended, however, and the accruing interest on the debt forced the bank to appoint receivers this week. RBS declined to comment.

The hotels were acquired by RBS through the £951m takeover of Condor, a company jointly owned by Whitbread and Marriott International, in April 2006. Five of the hotels were sold in 2007 for £50m, and the money was used to pay down some debt.

Copyright The Financial Times Limited 2011.
=========================================

[bitochon] 14/6/2011 18:49

Thanks for info Kenny. Barclys haven't been as kind to me. Have sent them a gentle email!!

[kenny] 14/6/2011 14:27

Just received it today - another error by Barclays who have during the last week insisted that DGRE have not declared or paid a dividend, despite my giving them a link to the RNS on InvestEgate!!

[rj allen] 14/6/2011 12:29

Anyone received the 2.13p dividend due 8th June yet?

[kenny] 02/6/2011 14:44

No link, you need to email DGRE and ask for them to be emailed to you:

[e-mail]

[grollfam] 02/6/2011 13:50

Thanks Kenny

Can you post a link of the quarterly accounts?

[kenny] 02/6/2011 13:20

Obtained the accounts for the quarter to 31 March 2011 and NAV is down to 118p mostly due to a £47m write down in the NCP car parks. This in turn due to the fact the operating company has approached them about "meeting its obligations going forward". Also DGRE were presented with a list of car parks which were causing the operator losses and they wished to discuss surrender of leases on those, all a bit ominous.

DGRE informed the valuer, DTZ, who wrote the properties down by £47m to £893m. A fuller valuation review being carried out by valuer but based upon DTZ's work to date they do not anticipate any further material adjustment to the updated valuation.

Nothing is too straight forward with DGRE!!!!

[grollfam] 28/5/2011 09:40

KENNY
Just found this in French canadian newspaper.....
The jist is that DGRE are also selling other canadian properties..Not sure of DGRE,s share in these props...Luckily we owned 100% of Bell Tower ....


Tshuva continues to liquidate its portfolio Quebec

Magnate Yitzhak Tshuva is one more step in the liquidation of its properties in Quebec. The Israeli Delek Global Real Estate sold on Wednesday the 700 de la Gauchetière West, Montreal to Dundee REIT. The company pocketed $ 281 million in the transaction. According to Israeli media, as it tries to solve some of its serious financial problems.
With the sale of the Montreal skyline, the Israeli mogul Tshuva Yithzak, who controls the parent company Delek, concludes the latest in a series of property sales in Quebec. In February and March, his private real estate arm, Elad, has sold four of its malls in the province REIT Homburg Canada and First Capital Corporation. Fruit Sale: $ 168 million.
Another private company controlled by billionaire, Delek Belron International, has also sold a small portfolio of 30 shopping malls including Jean Coutu, Quebec-based company acquired in 2005, The Business has learned.
In Tel Aviv, the CEO of Delek Global Real Estate (DGRE) responded "no comment" to questions from The Business. But according to Israeli media, these property sales are made necessary by the big financial troubles experienced by the company and its principal owner.
Its parent company, Delek Real Estate, in 2010 recorded a loss of 745 million shekels, or more than $ 215 million. Result: she now has trouble making payments relating to bonds it sold to finance itself.
Before the end of May, it must make a payment of 220 million shekels, or nearly $ 65 million. That payment is only made possible thanks to a 60 million loan granted in late April by the Toronto-based private bank First National.
In September, Delek Real Estate has to repay another $ 100 million to bondholders of the company.
According to Israeli media, Yithzak Tshuva has also invested almost $ 45 million of his own money in the company.
The old Bell Tower is still encumbered by a mortgage of $ 117 million, which will be assumed by the buyer. The building of 28 floors and nearly one million square feet houses mainly offices of the insurer AON, Bell and National Bank. According to Israeli media, bordered on the rental income of 30 million per year

[kenny] 26/5/2011 16:42

Been looking at where the funds for any 3rd potential buyback may come from – assuming the 2nd buyback proceeds before the end of September. In a nutshell, I am struggling to find any other material pot of money that can be readily realized.

There is property worth about £30m net of loans left in Canada but that is in a spread of properties albeit the Canadian properties have the lowest gearing and the company has already announced they are all for sale.

Everything else is highly geared:

Germany – 95% (and a few being taken by the banks)
Switzerland – 79%
UK – 74% (this will have improved during 2011 on account of a couple of sales of 100% geared properties)

However, the main asset in the UK portfolio is the NCP car parks and it is not realistic to sell them in view of a) the fact a sale crystallizes the swap losses and, therefore b) why crystallize that loss when the income on that asset is so good.

I have not seen any articles about any other DGRE properties that are for sale and it looks like sales activity has slowed. Anyone have any insight into any properties for sale or which could produce material net cash?