In a surprise move, Gindi Holdings announced on Friday that it had agreed to buy the 72.7% controlling stake in Alon Blue Square Israel from Alon Israel Oil Company Ltd. Alon Blue Square has debt amounting to NIS 900 million to its banks and bondholders, and one of the conditions of the deal is that the company's management headed by chairman Avigdor Kaplan should complete a debt rescheduling arrangement with the creditors within ten days.
The sale agreement also includes the right to receive shares in a rights offering to be conducted by the Alon Blue Square Israel, if any, for the NIS 110 million that Alon has previously provided to the company as a loan and any rights derived therefrom as well as the rights to a loan of NIS 60 million that Alon granted to the Company.
Alon Blue Square's announcement warns that "There is no guarantee that all the closing conditions to this transaction will be satisfied or that this transaction will close."
Alon Blue Square owns 54% of Blue Square Real Estate (TASE: BLSR), which has a market cap of NIS 833 million, 63% of fuel stations company Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) worth NIS 333 million, and 78% of homeware company Na'aman, worth NIS 31 million. Alon Blue Square also held supermarket chain Mega, which recently obtained a stay of proceedings and had a trustee appointed to run it. In a debt arrangement agreed last summer, Mega received an injection of cash from Alon Blue Square, which also took on a considerable proportion of Mega's debt, but despite this Mega continue to lose money, which led to the appointment of a trustee, who will try to sell the chain entire or in parts.
Gindi Holdings earlier made a bid for Blue Square Real Estate alone.
Gindi Holdings, whose main business is residential real estate, is owned by siblings Lital, Avi, Guy, Roy and Menahem Gindi.
A spokesperson for Gindi Holdings said, "This acquisition is part of the company's strategic plan for expansion and growth in new areas of business."
Published by Globes [online], Israel business news - www.globes-online.com - on January 31, 2016
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