Amos Luzon in Advanced Talks to Acquire Kohan Properties for $6.4 Million

Israeli businessman Amos Luzon is reportedly in very advanced negotiations to acquire Kohan Properties from fellow businessman Natanel Lorenzi. The deal, valued at $6.4 million, comes less than a week after Lorenzi took control of the company's shares. Luzon's holding company, Luzon Entrepreneurship and Energy, would purchase the shares from Lorenzi and his company, Dekama Finance.

Lorenzi, an Israeli businessman based in the UK, had provided a loan of approximately $4 million to Michael Kohan about a month ago, with Kohan pledging all his shares in Kohan Properties as collateral. When Kohan failed to repay the loan on time, Lorenzi exercised his right to seize the shares. Kohan had taken out the loan after bondholders of the company, registered in the British Virgin Islands, threatened to demand immediate repayment of a NIS 412 million bond issued on the Tel Aviv Stock Exchange. This threat followed the discovery that Kohan had withdrawn about $9 million from the company to repay other private loans.

Lorenzi has committed to bondholders to cover all their repayments while simultaneously working to sell the shares to Luzon. Market speculation suggests Kohan aims to repay his debt to Lorenzi, now around $4.6 million including interest. Lorenzi's ability to liquidate company assets is somewhat restricted as he requires bondholder approval. However, the shares were transferred to him free of encumbrance, allowing him to sell them. In 2016, Luzon acquired Dori Construction for only NIS 10 million, including its stake in the Dorad power station, a company now valued at NIS 1.9 billion.

Kohan Properties owns 35 commercial properties across 19 U.S. states, valued at approximately $710 million. Eight of these properties, worth $213 million, are pledged to bondholders. The company's bonds are trading at a gross annual yield of 12.5%. Sources close to the deal believe Kohan will have difficulty challenging Luzon, who was not involved in the original loan or collateral seizure. They anticipate the share sale could lead to Kohan losing control of the company and its assets. However, Kohan is not expected to concede easily, and major bondholders like More, Meitav, and The Phoenix could still demand immediate repayment of the debt.