Amos Luzon Buys Control of Kohan Properties for $5 Million
Translated & summarized from TheMarker by baba
Amos Luzon has acquired control of Kohan Properties for approximately $5 million, purchasing the company from Natanel Lorenzi who had taken ownership just a week prior. The deal sees Luzon's group buy 60% and Alpha Gidurin take 40% of the company, which has faced significant financial issues and bondholder concerns under its former owner, Mike Kohan. Luzon inherits a company with reported assets of $736 million but must now address bondholder demands and potential rehabilitation costs. The acquisition follows a pattern for Luzon, who previously navigated a complex deal involving Dori Construction.
The story in 5 lines · by baba
- Amos Luzon acquired control of Kohan Properties for approximately 19.5 million shekels from Natanel Lorenzi.
- Lorenzi had taken ownership of Kohan Properties just one week prior from former owner Mike Kohan.
- Kohan Properties faces challenges including bondholder demands and a credit rating downgrade to Baa2.
- The company's reported assets are valued at $736 million, but their realizable value is uncertain.
- Luzon's group will own 60% of Kohan Properties, with Alpha Gidurin holding the remaining 40%.
Amos Luzon has acquired control of Kohan Properties for approximately 19.5 million shekels (about $5 million), just one week after Natanel Lorenzi took over the company's shares. The Luzon Group, controlled by Amos Luzon, announced on Friday that it, along with Oren Halfon's Alpha Gidurin company, purchased all of Kohan Properties' shares from Natanel Lorenzi. The Luzon Group is acquiring 60% of the company, while Alpha Gidurin is taking a 40% stake.
Kohan Properties, formerly owned by Mike Kohan, recently issued bonds in Tel Aviv. Three months ago, it was revealed that Kohan had improperly taken company funds for his private businesses, continuing even after bondholders opposed his actions and appointed an additional signatory to prevent further withdrawals. After being removed from all his positions, Kohan was found to have pledged all his company shares to Natanel Lorenzi as collateral for a $4 million loan. When Kohan defaulted on the loan, Lorenzi exercised the pledge.
Lorenzi reportedly made a quick profit of 1.5 million pounds sterling by selling the company to Luzon after only a week, while also divesting himself of the complications with the bondholders. Luzon, on the other hand, acquired a company with assets reported at $736 million, though market analysts suggest these assets may be difficult to realize at their book value and could be worth less. Luzon will now have to contend with the bondholders, from whom Kohan Properties raised 412 million shekels earlier this year.
Some bondholders are reportedly frustrated with the company's problematic management and may demand immediate repayment of their bonds, especially since issues have repeatedly surfaced in recent months. The change in ownership provides bondholders with grounds for immediate redemption. Additionally, Midroog credit rating agency downgraded the company's credit rating to Baa2, citing business and financial uncertainty stemming from the previous owner's issues, weak liquidity requiring asset sales, and increased leverage due to the acquisition of two significant assets. Midroog warned that Luzon might find the costs to rehabilitate the company higher than anticipated.
Luzon has experience with similar ventures, having acquired control of Dori Construction about a decade ago for roughly 10 million shekels. Dori Construction later entered receivership, but through that deal, Luzon gained a significant stake in Dorad, which he has since increased. Luzon recently reported plans to sell a portion of his Dorad shares for approximately 223 million shekels.
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