Israeli businessman Yitzhak Tshuva has agreed the sale of 70% of his stake in Delek Israel in a deal valued at 750 million shekels ($221 million).
Delek Group, one of Israel's largest companies, has had a tough year, seeing its shares fall 87% as energy prices plummeted due to the global coronavirus pandemic.
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After a lengthy negotiation with Rami Levy, owner of Israel's third-largest retail supermarket chain, faltered, Teshuva finalized a deal with Lahav LR Real Estate's Avi Levy, Eli Lahav, Ilik Rozensky, and Uri Mantzur.
Following Delek's recent dividend distribution of NIS 150 million ($44 million), the deal, inked just before the weekend, values the company at NIS 750 million.
Sources privy to the negotiations told Israel Hayom that Levy, who eyed Delek's chain of gas station-based convenience stores, backed out of the talks over warnings by officials in the religious sector who said that if he operated stores on Shabbat – which Delek's "Menta" chain does – they would call for a consumer boycott against them.
The buyers have the option to add 3.5% of Delek Israel to the deal over the next four months, and Levy may choose to join the deal, the sources said.
The deal allows Delek to repay the balance of its debt to the banks – NIS 342 million ($100 million) – as well as release the group's energy exploration partnership, Delek Drilling, from the lien held by its bondholders.
The move is expected to yield the group NIS 630 million ($180 million) in revenue.
Tshuva has already realized NIS 3 billion ($885 million) in assets and raised another NIS 313 million ($92 million) over the past eight months, under impossible market conditions.
The Israeli Competition Authority, which serves as the Finance Ministry's antitrust regulator, has instructed Delek Drilling to dispose of 25% of its holdings in the Tamar offshore gas field by the end of 2021, but has allowed it to keep its stake in the Leviathan basin (45.33%).
The ICA has also ordered Delek to remove its veto right from the Tamar reservoir without delay and it has complied.
The company, however, continues to act, along with Chevron, to thwart the agreement Israel Electric Corp reached with the other partners in the project, which it claims runs is contrary to their deal.
Tshuva's business empire faced hard times during the 2008 global recession as well. at the time, it was saved largely due to the discoveries of natural gas off Israel shores.
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