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Azrieli Bond Issue Plan Reveals Details of Properties

Azrieli is considered Israel's largest real estate group with about 1 million square meters in managed assets.

David Azrieli is headed for Ahad Ha'am Street. Yesterday it became clear that the man who brought mall tidings to Israel and immortalized his own name in huge office towers in central Tel Aviv, plans to take his group public.

Azrieli group executives are involved in a complete merger of all the Azrieli family-owned subsidiaries. The business strategy then calls for listing the company on the Tel Aviv Stock Exchange. Market players estimate Azrieli's Israeli real estate operations could garner a market cap of $1 billion with assets valued at NIS 7 billion. Group companies owe about NIS 2.5 billion.

Azrieli is considered Israel's largest real estate group with about 1 million square meters in managed assets. The group has annual turnover of NIS 700 million including from seven major malls. It also owns office towers in Tel Aviv, Herzliya, Holon, Be'er Sheva and Jerusalem.

In the interim until the entire company goes public, flagship subsidiary Kanit Hashalom Investments will issue NIS 500 million in bonds.

In a presentation for the financial market prior to the bond issue, the company reveals a number of details it had played close to the chest as a privately-held enterprise. In a report by credit rating agency Midroog, analysts write that management believes that as a public company it will have to implement a regular dividend policy. They also say the company is considering expansion into non-synergetic activities, including recent negotiations to take over credit card company Visa ICC, as well as currently examining entry into the infrastructure sector.

The bond issue is based on cash flow from land Kanit purchased one month ago in a debt and stock takeover of two real estate companies in which Kanit had been partners with Bank Leumi's funds. Midroog believes the two companies, with space in the 350,000 square meter Azrieli mall, will provide strong cash flow.

Azrieli group president Menachem Einan said "after 20 years in Israel, we bring Israeli investors a financially stable group with successful properties and stable, responsible management.