Jordache Owners, Nakash brothers, buy Jerusalem Economy stake

The deal increases the holdings of the Nakash family in Israel which includes: operate the port of Eilat , an Airline and hotels.

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Nakash brothers, owners of jeans maker Jordache Enterprises Inc., acquired a 39.6 percent share capital and 45 percent of the voting rights in Jerusalem Economy Ltd., a Jerusalem-based developer of industrial and commercial buildings.

The deal estimated by Israeli Calcalist at about 380 million shekels ($97 million). Nakash family and other investors injecting an additional 200 million-250 million shekels ($51 million – $64 million) into the company in the coming months.

Bloomberg reports that the shares jumped 20 percent, the most since May 2009, to 13.12 shekels at 10:38 a.m. in Tel Aviv, compared with a 1 percent gain of the benchmark TA-25 index. The yield on the company’s 5.35 percent bonds maturing Dec. 2017 slumped 674 basis points to 8.21 percent, the lowest level on a closing basis since Dec. 11.

At the beginning of August, Bank Leumi, which has a lien on the shares in the real estate company, had been negotiating with a company controlled by billionaire Beny Steinmetz.

But, Steinmetz’s delay over the final details of the negotiations and Leumi therefore introduce the deal to Nakash brothers and sell them the shares.

Nakash family holdings in Israel includes a franchise to operate the port of Eilat (2013); Arkia Israeli Airlines Ltd., a charter flight operator (2006); Hotels in Eilat and Jerusalem, and a new hotel in Jaffa under construction.

According to results filed to the Tel Aviv Stock Exchange Jerusalem Economy posted a loss of $29 million in the first quarter after gross profit from its unit’s operations in Russia declined 23 percent, .

Bloomberg says Israel’s ratings company Midroog put the company’s bonds under credit review on Aug. 26, saying it hadn’t managed to sell significant assets in 2015 on which it was relying to meet debt payments.

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