Ashtrom Group Planning NIS 1 Billion Initial Public Offering

Shareholders seek to cash out from interest in closely-held builder valued at as much as NIS 2 billion.

Ashtrom Group, one of Israel's largest closely-held construction companies, is getting ready to conduct an initial public offering for trading on the Tel Aviv Stock Exchange that could reach NIS 1 billion, TheMarker has learned.

The company, whose board quietly approved the plan recently, plans to hold the share offering in the next six months. It will include shares as well as bonds, although the exact sums to be raised from each tranche have yet to be determined. The company is valued at somewhere between NIS 1.5 billion and NIS 2 billion before the money, market sources said.

Ashtrom has begun preparing a prospectus for investors and financial reports in accordance with International Financial Reporting Standards that will be based on its 2013 financial reports. Underwriters for the offering have yet to be chosen.

The IPO would be a welcome shot in the arm for the TASE, which has seen the number of listed companies decline, most notably with the decision by semiconductor company Mellanox to delist last summer.

Ashtrom Group, founded in 1963 is owned by the UNEDCO company (75%) and Allied Group (25%). UNEDCO is controlled by the Giron (33.3%), Nussbaum (33.3%), Meshorer (15.4%), Rubin (11%) and the Mor and Lipshitz (7%) families. The families' accumulated capital is estimated to be worth $250 million and the stock listing is viewed by some in the market as effort by some of the families to realize the value of their shares in the company by selling them to the public.

Ashtrom Group's main business is commercial, industrial and residential real estate development and infrastructure projects. In the latter area, the company was involved in building Jerusalem light rail system and the Haifa-area Carmel Tunnel. The group has an estimated annual revenue of between NIS 3 billion and NIS 3.5 billion and estimated shareholder capital of NIS 1 billion. Ashtrom Group has 1,100 employees and controls two publicly traded companies in Israel - Ashtrom Properties, which has a market value of NIS 710 million, and Ashdar, with a market value of NIS 310 million.

Shares of Ashtrom Properties rose 3.4% in TASE trading on Thursday to NIS 9.37. Earlier this week the company sold NIS 198 million in a public bond offering.

Workers at the TASE.Credit: Bloomberg

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