Demand was lively in the tender for investment institutions in real estate company Minrav Projects' Tel Aviv Stock Exchange (TASE) IPO yesterday, ensuring the company NIS 118 million in proceeds, compared with a minimum amount of NIS 80 million planned by the company. Thanks to this oversubscription, the company now plans to raise a total of NIS 150 million, compared with the NIS 100 million minimum set before the offering.
In its announcement about the offering, Minrav Projects stated that demand in the tender had totaled NIS 255 million, and that the price per unit (which included shares and options) set in the tender was 15% higher than the minimum, reflecting a company value of NIS 320 million, before money.
Minrav Projects CEO Dror Kuznitsky said, "I thank the outstanding institutional concerns for expressing confidence in the company in Minrav Projects' IPO. The proceeds from the offering will substantially reinforce the company's balance sheet and liquidity, and enable it to take greater advantage of opportunities in the Israeli residential housing market. It will also enable the company to increase its volume of business without any significant increase in its financial risk."
Minrav Holdings Ltd. (TASE: MNRV) founded Minrav Projects, which it currently fully owns, in 1998. The company develops residential projects, including the commercial space in the projects. As of now, Minrav is developing and building 2,850 housing units, and sold 224 housing units for a total of NIS 338 million in 2016. Minrav says that the company is focusing on the middle market with apartments at prices ranging from NIS 1.5 million to NIS 2.5 million.
Minrav Projects' revenue climbed 23% to NIS 341 million in 2016. The amount was influenced by the apartment delivery date, according to the accounting rules. The company's net profit was up 19% to NIS 29 million. Its equity was NIS 292 million, and its current liabilities totaled NIS 520 million.
Positive sentiment
Other than development in Israel, Minrav Projects also owns Minrav Investments, which engages in development for construction in Hungary, and Minrav Infrastructure and Mey Menashe, which operate wastewater purification machinery under the build, operate, transfer (BOT) method. The company also owns a plant in Gezer for producing PVC profile products through Minrav Infrastructure.
As a result of the offering, the share of parent company Minrav Holdings, whose controlling shareholder is Avraham Kuznitsky, has enjoyed positive sentiment all week, with the price jumping 50%, reflecting a NIS 540 million market cap.
The IPO, the third on the TASE this year following the IPOs of the Ratio Petroleum Energy Ltd. Partnership (TASE:RTPT.L) partnership and pharma company Novolog (Pharm-Up 1966) Ltd. (TASE:NVLG), is slated for completion by the end of the week.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 28, 2017
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