Delola Car Importer CEO Bets $50 Million on Company Amid Market Slump
Gil Agmon, CEO and controlling shareholder of Israel's Delola Car, has purchased approximately 10% of the company's shares for around 200 million shekels ($50 million). This acquisition was made at a 25% premium to the current market price, signaling a significant personal investment and belief in the company's future despite recent struggles.
Delola Car, once a dominant force in the Israeli automotive market with brands like Mazda and Ford, has seen its market share erode significantly. This decline is attributed to changing consumer preferences favoring new Chinese brands and disappointing investor returns from the company's ventures into infrastructure and high-tech sectors. The company's stock price has fallen 70% from its peak four years ago.
Adding to the complexity, Delola Car operates as a holding company with substantial stakes in infrastructure firm Veridis and real estate, alongside its core car import business. This diversified structure, coupled with a significant financial debt exceeding 3.5 billion shekels, makes the company difficult for the market to analyze. Delola Car has also faced setbacks in its investment portfolio, including a substantial loss on its investment in the chip company Hailo, which impacted its first-half financial results, leading to a loss of 78 million shekels compared to a profit in the previous year.
Despite these challenges, Agmon's move is seen by some as a bold statement of confidence. He previously made a similar share purchase of 145 million shekels two years ago. While the company has experienced notable successes, such as early investments in Mobileye, recent years have been marked by disappointments in its venture capital investments, including AutoTalks and Innoviz. Industry experts are divided on Delola Car's future prospects, with some doubting a return to past market dominance and others suggesting Agmon might still have a surprise strategy.
Looking ahead, Delola Car is pinning hopes on new models from Chinese brands, the launch of Mazda's electric vehicles, and growth in its Eurodrive leasing arm. The company is also exploring the sale of its office building in Tel Aviv for an estimated 562.5 million shekels to bolster its cash flow. However, the company and Agmon declined to comment on the recent share purchase.
