CIM Group Inc. is the US private equity fund interested in buying Yitzhak Tshuva's 55% stake in Delek Real Estate Ltd. (TASE: DLKR). In a notice to the TASE today, Delek Real Estate said that CIM was conducting due diligence on the company, which will be completed within two weeks. In other words, CIM will decide whether to acquire the company by September 12.
Trading in shares of Delek Real Estate was suspended this morning. Their price is now rising strongly in response to the announcement.
CIM Group is owned by Israeli expatriates Avi Shemesh and Shaul Kuba.
Thegroup, which is based in Los Angeles, provides financing for and acquires troubled real estate companies. It has more than $4 billion in assets under management.
On August 14, Delek Real Estate announced that Tshuva was in talks to sell his stake in the company to a US private equity fund, which would provide the company with a NIS 500 million loan.
Delek Real Estate has a shareholders' equity deficit of NIS 1.25 billion, due to its heavily leveraged acquisitions of properties in Western Europe and North America through Delek Global Real Estate plc in the mid-2000s. Delek Real Estate now operates through Delek Global Real Estate overseas and Elad Residential Ltd. in Israel. The company owes its bondholders NIS 2.1 billion, out of a consolidated debt of NIS 15 billion. The company is due to pay bondholders NIS 570 million in 2011-12.
Delek Real Estate says that it has no connection with the managers of CIM.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2011
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