After its holding in Israel Land Development Company (Nasdaq: ILDCY; TASE:ILDC) got Gibor Sport Holdings (TASE:GISP), controlled by Roi Gil and Eitan Eldar, into trouble, they decided to sell it. Gil and Eldar have wanted to sell the holding for months, but a sale was only possible now. Today, Gibor Sport subsidiary, Yarden Investment (TASE:YRDN), sold 1.3 million Israel Land Development shares to Excellence Investment Group at NIS 15.70 per share, a 1% discount on the market price, for a total of NIS 20 million. The sale caused a heavy NIS 15 million turnover in Israel Land Development shares on the Tel Aviv Stock Exchange (TASE) today.
Excellence Investment does not plan to hold the shares itself. Half the shares will be distributed to institutional investors and half to a single investor who wants to buy the block of shares. Excellence Investment also has a three-month option top buy the rest of Yarden Investment's 20% stake in Israel Land Development at NIS 17 per share. If the options are exercised, NIS 10 million worth of shares will be distributed to institutional investors and the rest to the single investor, who will then own 20% of Israel Land Development. Another condition of the sale allows Yarden Investment to enjoy 50% of the profit, if any, the single investor will earn from the sale of his stake in Israel Land Development, assuming that the block of shares is sold at more than NIS 17 a share.
Gil and Eitan's investment in Israel Land Development was the decisive factor in Gibor Sport's descent to insolvency and a creditors arrangement with the banks. Gil and Eldar bought 21% of Israel Land Development's share capital from the Nimrodi family for NIS 285 million. They subsequently increased their stake to 24%, for a total investment of NIS 300 million, mostly financed by bank credit.
Assuming the entire sale goes through, Gil and Eldar will receive NIS 113 million altogether. If the full deal is carried out, Yarden Investment's deal will be remembered for its NIS 186.6 million capital loss, amounting to 62% of its investment.
Gibor Sport's total liabilities are estimated at NIS 704 million, including NIS 601.7 million to the banks.
Published by Globes [online] - www.globes.co.il - on January 12, 2004