Zohar Levy, who recently became the largest shareholder in real estate company Jerusalem Economy Ltd. (TASE:ECJM) (JEC), after Summit Real Estate Holdings Ltd. (TASE: SMT), which he controls, invested NIS 300 million in the real estate company through the offering it made a month ago and the distribution it made two weeks ago, is taking steps to replace Jerusalem Economy's board of directors.
Jerusalem Economy notified the Tel Aviv Stock Exchange yesterday that it had received a notice from Summit in which the company's board is asked to convene a shareholders meeting as soon as possible. At the meeting, the shareholders will be asked to dismiss all the directors other than the external directors, to appoint Zohar Levy and two others on Summit's behalf as directors, and to amend section 77 of the company's Articles such that its board of directors will have 5-7 members only.
At present, Jerusalem Economy's board has nine members, of which three were appointed by Bank Leumi (TASE: LUMI) (to which the shares owned by previous controlling shareholder Eliezer Fishman were mortgaged against his personal debt). The change in the Articles, the downsizing of the board, and the appointment of directors representing Summit, are designed to enable Levy in effect to take over the company and run it.
In addition, Summit requests that, until the shareholders meeting, no decisions should be made in the company that are not in the ordinary course of business. Jerusalem Economy, run by David Zvida, said in response, "The company's board of directors will act in accordance with its Articles."
Summit, which is active in the real estate market in Germany and has a market cap of NIS 1.55 billion, currently holds 20% of Jerusalem Economy, which has a market cap of NIS 1.7 billion. Summit's stake will rise to 22% if it exercises the warrants that it holds.
Eliezer Fishman is the controlling shareholder in "Globes".
Published by Globes [online], Israel business news - www.globes-online.com - on April 12, 2016
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