Rami Levy takes control of a construction company: he will cover its multi-million debts and receive 80%

Rami Levy continues to increase his hold on the real estate market, even during a period of slowdown. The company has signed a binding agreement to acquire control of the private contracting company "Reshit Bniya ve-Nihul Projectim" - a company with a high classification - Gimmel-5.

According to the agreement, Rami Levy Real Estate will hold 80% of the contracting company's share capital in exchange for payment of their par value. At the same time, Rami Levy will provide the acquired company with an owner's loan in the amount of 13 million NIS (at a prime plus 1.5% interest rate), which will be used almost entirely to pay off its debts and liabilities to banks, tax authorities, and employees, and to erase existing liens against it.

According to the agreement, Rami Levy is hedging itself against risks, which include past debts of the acquired company. All profits, losses, and liabilities arising from existing projects that "Reshit Bniya" carried out for third parties will be attributed to and apply solely to the current shareholder.

It was also agreed that the current shareholder of the company will serve as the CEO of the contracting company for a period of 7 years (84 months), with Rami Levy Real Estate being granted an option to purchase his remaining shares (20%) at the end of this period.

At Rami Levy, they note that the main factor for the move is strategic and not quantitative - the creation of an execution arm that will provide services for the projects of Rami Levy Real Estate and the Rami Levy Group, which are building quite a few apartments in Jerusalem. This will allow it to control and supervise construction processes and costs better. The transaction will be financed from the company's own sources and is subject to the approval of the Competition Authority and the Registrar of Contractors.