Delek Real Estate Ltd. (TASE: DLKR), controlled by Yitzhak Tshuva, this morning confirmed "Globes'" exclusive report from last night, that negotiations on a deal to transfer control from Tshuva to the CIM Group Inc. of the US cannot continue under the current terms of the memorandum of understanding, and that new formats to implement the deal will be investigated.
Delek Real Estate has reached an understanding with CIM to extend discussions between them for an additional 30 days, in order to examine possible new formats for implementing the deal.
On August 13, the two parties announced the signing of a memorandum of understanding between Tshuva and CIM, stipulating that in exchange for a financing package worth NIS 600 million, to be injected into the company, Tshuva would transfer control over Delek Real Estate to CIM, along with a commitment from Tshuva to renounce the NIS 120 million (in the form of bonds and deposits) that CIM owes him.
Over the last month, CIM representatives have conducted thorough due diligence on Delek Real Estate and its assets, and in the end CIM decided not to pursue further negotiations in the current format, and the sides decided to investigate alternative formats for implementing the deal. Tshuva continues to hold the position that under any format agreed upon between the sides, there will be no reduction in the fund's debt to bondholders.
Parties close to the negotiations noted that the atmosphere in the talks has been very positive, and that both sides are willing to reach an agreed-upon format to implement the deal that will be acceptable to all concerned, since both sides are interested in closing a deal.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2011
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