Tadiran Holdings Ltd. (TASE:TDRN), controlled by Moshe Mamrod, is negotiating to acquire gas distributor Supergas from Azrieli Group Ltd. (TASE: AZRG) for over NIS 200 million, sources inform "Globes." Tadiran confirmed the report this morning, but stressed that there was no certainty that a deal would take place or about the terms of any deal.
Tadiran Holdings currently engages mostly in the importing and marketing of air-conditioners. Last February, the company reported a plan for exiting the marketing of home electrical appliances (that are not air-conditioners) to retailers and end consumers. In addition to its air-conditioner business,the company is planning to operate inenergy efficiency. A Tadiran Holdings spokesman declined to comment on the matter.
Azrieli Group holds Supergas through its Granite Hacarmel subsidiary, which also holds fuel company Sonol Israel Ltd, and infrastructure company GES. Granite Hacarmel was delisted from the Tel Aviv Stock Exchange (TASE) in October 2012, and Azrieli Group has been acting since then to sell these holdings, either separately or as a single unit, because they are not part of its income-producing real estate core business.
As part of this sale process, Granite Hacarmel last year sold paint company Tambour to the Singapore-based Kusto company for NIS 500 million. An agreement was also signed and canceled for the sale of Sonol to the late Shlomo Shmeltzer for NIS 450 million, and an agreement has been signed, but not yet completed, for the sale of GES's holdings in the ViaMaris desalinization plant on the Palmach shore to the Israel Infrastructure Fund for NIS 430 million.
Supergas, with 350 employees, operates mainly in the marketing and supply of liquefied petroleum gas (gas used for industry, heating, and cooking). In addition, it builds and operates natural gas distribution networks through a subsidiary owned jointly with Shapir Civil and Marine Engineering Ltd.. Last year, Supergas sold its solar networks business for NIS 174 million, generating a NIS 30 million net profit for the company.
Azrieli Group's reports indicate that Supergas has a NIS 450 million debt from an issue of bonds to investment institutions in July 2007. The bonds, rated Aa1 by Midroog, were issue for 18 years, and bear 4.9% annual interest. Through its Granite Hacarmel subsidiary, Azrieli Group undertook that if it ceases to be the controlling shareholder in Supergas, it would make a NIS 45 million offer to purchase to the bondholders for less than the bonds' adjusted value. The cost of Supergaz CEO Eyal Henkin's salary totaled NIS 2.8 million last year.
Moshe Mamrod owns 79% of the shares in Tadiran Holdings, whose market cap is NIS 220 million. The company finished the first quarter of 2015 with a NIS 3.5 million net profit on a NIS 130 million turnover, an improvement over the corresponding quarter last year. The company posted a NIS 21 million net profit on a NIS 612 million turnover for all of 2014.
Tadiran Holdings is shifting its business, including an exit from its money-losing business in the marketing of home electrical appliances and a focus on importing and marketing air-conditioners, together with the expansion of its business in energy efficiency, lighting products, and related areas. As part of this process, Tadiran Holdings recently completed the sale of the import and marketing rights to Blomberg brand products to Ralco Agencies (TASE: RCLO), its competitor, for NIS 24 million. It is also negotiating with several parties for an agreement to grant usage rights to the Amcor and Crystal brands in exchange for royalties.
Published by Globes [online], Israel business news - www.globes-online.com - on May 31, 2015
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