Union Bank seeks a buyer for 9% of the ‘Ten’ shares pledged to it because of Eliezer Fishman’s debts

The shares are worth approximately 15 million shekels, and are meant to be sold as part of a process being managed by the receiver for the minority interest in Ten due to Eliezer Fishman’s enormous debts of about 270 million shekels to the Bank

16.01.17 | Michael Rohverger

Union Bank is putting up for sale the minority interest in Ten Ltd. pledged in its favor by Eliezer Fishman. Attorney Assaf Englard, of law firm Hamburger Evron & Co., who was appointed receiver for 9% of the Ten shares that were pledged in favor of the Bank, published in the media requests for proposals to purchase the shares. Under the terms of the RFP, the potential buyers will be required to lodge an autonomous guarantee valid for four months, at a value of approximately 10% of their bid amount. The notice also stated that in return for a payment of ILS 2,000, the receiver would provide interested parties detailed and non-public information in respect of Ten’s condition. In any event, it is known that in the first nine months of 2016 Ten recorded a net profit of 20 million shekels – an improvement from 2015, which the company ended without a profit.

Fishman has an enormous debt of 214 million shekels to Union Bank and this does not include guarantees in an amount of 55.6 million shekels, which he gave to third parties. To secure the debts to the Bank, Fishman pledged 1.7 million shares in Office Textile Ltd., a private company, whose value is estimated at tens of millions of shekels, 45 thousand shares in Ten Petroleum, a private fuel and retail company, worth an estimated 15 million shekels, 3.7 million shares in the publicly traded real estate company, Jerusalem Economic Corporation, at a market value of approximately 30 million shekels, and 1,200 shares in Svitland Developmenta, a company registered in Cyprus, and which operates in the real estate market in Ukraine – whose shares are today estimated at zero in terms of economic value.

A source close to the receiver says that “even before publication of the notice, and all the more so thereafter, massive interest was registered in purchasing the additional shares. It turns out that there are parties who are expressly interested in purchasing the minority interest due to, among others, Apax’s proven experience in maximizing returns on its investments in the Israeli capital market in recent years.”

The private investment fund Apax, which is managed in Israel by Zahavit Cohen, recently won the bidding contest for the controlling interest in Ten Petroleum and Retail Ltd. Apax submitted the highest bid – 137 million shekels – for 83% of the holdings in Ten. The price represented a value of approximately 166 million shekels for Ten. Apax thus outbid Sky Investment Fund, headed by Zvika Yochman and Nir Dagan, which submitted the lower bid.

For Hapoalim, this was a disappointing sale process, since for more than two years, even before Fishman entered the receivership process, Poalim Capital Markets, the investment banking and non-financial investment arm of the Bank, had tried to sell Ten at a value hovering around 250 million shekels. The efforts to sell even included talks with the Neumann family (the controlling shareholders in the Alon Motors Group), Eli Elezra and others – which ultimately did not mature into a binding agreement.

Those close to the receiver pointed out that people who now see the minority shares in Ten as an attractive buy, are influenced by the fact that in 2014 at a profit of approximately 3.8 billion shekels; and that Apax sold its investment in Bezeq at a profit of nearly 100%.