Less than a week after Minrav Projects listed on the Tel Aviv Stock Exchange, the fourth IPO on the local exchange so far this year is on the way. The offering in question is by real estate investment fund Menivim, which published a draft prospectus yesterday with a view to a combined equity and debt offering.
As far as is known, Menivim will attempt to raise NIS 70-80 million at a valuation of about NIS 270 million before money, which is similar to its shareholders' equity, and in addition it will issue a bond to raise up to NIS 100 million.
Menivim was founded in 2015 by Sharon Schweppe (chairperson), formerly CEO of Bayside Land Corp. Ltd.(Gav Yam) (TASE: BYSD1), and Itay Mel (deputy chairperson) as a real estate investment trust (REIT) that leases out its properties on long-term leases that are subject to a special tax regime. CEO of Menivim is Ofer Avram.
In 2015, Menivim raised almost NIS 270 million from several investment institutions, among them Poalim Capital Markets, Meitav Dash, Bar Ilan University, IBI, Halman Aldubi, and Gilad Pension Fund, which are currently the main shareholders, together holding 73%. The fund has three properties, in Rosh Ha'ayin, Jerusalem, and the Hartuv Industrial Zone near Beit Shemesh, with aggregate space of 35,000 square meters, plus 16,000 square meters of parking space.
In 2016, Menivim posted revenue of NIS 14 million and a net profit of nearly NIS 4 million. The draft prospectus reveals that the fund's founders and managers will enjoy a substantial upgrade in their compensation when it goes public. The agreement that Menivim signed with its management company provides for an annual management fee derived from the value of its assets, at a rate of 0.65%-1%, depending on the asset value.
Schweppe and Mel, each of whom currently receives a monthly salary of NIS 30,000 for an 85% position, will see that rise after the IPO to up to NIS 70,000, and rise further to up to NIS 100,000 a year later. The pair will also receive a bonus of NIS 600,000 each: NIS 300,000 after the IPO, and a further NIS 300,000 when Menivim holds assets worth at least NIS 360 million. The monthly salary of CEO Avram, currently NIS 75,000, will be revised after the IPO to NIS 87,500, and thereafter will gradually rise to NIS 125,000, in accordance with the value of the fund's assets.
The IPO of Menivim comes six months after the IPO of Megurit, the first REIT set up under the amendment to the REIT Law. Megurit raised NIS 240 million last year, NIS 60 million on the stock exchange and NIS 180 million in advance commitments before it began the institutional stage of it soffering.
Menivim is currently in negotiations to buy two properties in central Israel. It expects to buy income producing properties to a minimum value of NIS 300 million over the coming year, and says that its shareholders' equity will allow it to meet this target "even without raising additional capital", within the regulatory limits that allow it up to 60% leverage.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2017
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