Yitzhak Tshuva is set to move the offices of Delek Group Ltd. (TASE: DLEKG), the company he controls, to the Herzliya Pituah industrial zone. The group, managed by CEO Asi Bartfeld, has agreed to buy from the Dan bus company's real estate subsidiary an 11,000-sq.m. office building on Abba Even St., corner of Naomi Shemer St. The purchase price is NIS 245 million.
The headquarters of Delek Group, one of Israel's largest and most successful holding companies, is currently located in a modest office building in the southern industrial zone of Netanya. Tshuva resides in the city, and is closely associated with it; in the past, he was called more than once "the contractor from Netanya." If and when the deal is completed, the building in Herzliya will become Beit Delek, and will house the group's management and the headquarters of its subsidiaries. 15 years ago, in 1999, Delek Group moved all its offices and the offices of its subsidiaries from Tel Aviv to Netanya.
In its most recent financial statements, Delek Group stated, "The company offices are located in an office building on Giborei Israel St. in Netanya with 965 sq.m. of leased space, plus parking spaces. The rent is insubstantial." In the past, Delek Group was in negotiations for a building in Tel Aviv, with the ground floor being slated for use as a display room by auto importer Delek Motors.
It cannot be ruled out that the new offices will include such a display floor.
Billions of shekels in sell-offs
Delek Group is a holding company with a variety of enterprises in Israel and overseas in energy and infrastructure, finances and insurance, auto, and other sectors. At this time, Delek Group is leading a strategic measure to change its business focus from a variety of areas to a focus on development of oil and gas assets.
In this framework, the group has sold off a number of companies it owned for proceeds amounting to many billions of shekels. As of now, the group is in the very advanced stages of selling the controlling interest in The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) insurance company (which controls Excellence Investments Ltd. (TASE: EXCE), among other things). Delek Group is traded on the Tel Aviv 25 index at an NIS 11.5 billion market cap, and the share has added 3% to its value since the beginning of the year.
A bond issue launched last month by Delek Group scored high demand, with the company raising NIS 800 million at 4% annual interest. The issue was the company's second since the debt arrangement for Delek Real Estate; the first, of about the same proportions, was in February 2015. S&P Maalot gave Delek Group an A rating with a stable outlook. Maalot economists wrote, "The investment portfolio is of medium-to-high quality, resting on the company's standing in the natural gas market in Israel, which strikes us as monopolistic."
On the risk side, the Maalot review noted "little geographical dispersion of the asset portfolio, with a focus on the Israel market, a relatively high degree of concentration in the asset portfolio, and great exposure to the energy sector, which features relatively high risk. At the same time, Maalot explained that Delek Group had "good financial flexibility as a result of its marketable assets portfolio," as well as an appropriate liquidity profile at the holding company level."
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2015
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