Two weeks after completing the acquisition of full ownership of holding company Alon Blue Square, as part of a debt settlement in the company, Moti (Maurice) Ben-Moshe is expanding his plan for raising new capital for the company. Figures released by the company yesterday reveal that it intends to raise NIS 300 million in a new bond offering by the end of December, and to raise a further NIS 400 million in 2017.
This is an expansion of the previous plan that the company published two and half months ago, whereby it was to have raised NIS 550 million in two tranches in 2017. The report released yesterday indicates that the new financing is likely to include conversion of existing Series C bonds to new bonds secured on the company's liquid assets.
Alon Blue Square found itself in a serious liquidity squeeze this year after its attempts to support supermarket chain Mega, which it then controlled, failed and undermined its own position. In February, the company approached its creditors - the banks and bondholders - with a request to hold talks on a debt arrangement. The creditors preferred the bid by Ben-Moshe to that made by Gindi Holdings.
Ben-Moshe was chosen by the creditors after he agreed to inject NIS 900 million into Alon Blue Square over three years to cover its debts, and to buy full ownership of the company for NIS 115 million from Alon Group.
In fact he paid NIS 114 million to Alon Group and a further NIS 7 million to minority shareholders, and injected NIS 300 million into the company itself at the time of completion. The company now estimates that Ben-Moshe will be required to inject NIS 100 million more next year, so that his total investment is some NIS 500 million.
Alon Blue Square said in its statement, "The company estimates that in the remainder of 2016 and during 2017 it will be possible to execute refinancing whereby the company will carry out early redemption of existing debt to which the debt settlement applies and raise new debt of NIS 700 million on the basis of the value of the shares in the companies it holds (Blue Square Real Estate, Dor Alon, and Na'aman Group, O.C.) that should be able to stand as collateral for the new debt.
"The assessment that the refinancing is possible is based upon the value of the shares in the public companies held, which stands at NIS 1.4 billion at the time of this notice, so that the loan-to-value ratio at the time the debt is raised will not be less than 0.67."
Published by Globes [online], Israel business news - www.globes-online.com - on September 27, 2016
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