Following an assessment published in Globes a few months ago regarding a possible takeover of the food company Saladi Shamir by Adi Zim, which ran into difficulties, the financial statements of SR Accord Under his control provide for this an official stamp.
SR Accord, which operates in the field of non-bank credit, updates that it entered into an agreement last month with Saladi Shamir to provide a credit facility of NIS 15 million “for a period of at least two years from the date of the agreement”, and with the possibility that the actual credit will be higher than mentioned.
As part of the terms of the agreement, SR Accord received without consideration “an option for a period of 5 years to purchase up to 80% of Shamir shares (fully diluted) in exchange for an additional exercise of up to NIS 10 million.”
This is when, according to SR Accord, it reserves the right “to exercise the option at any time, in full or in part, and to trade it or exercise it at its sole discretion, subject to the conditions set forth in the agreement in this matter.”
Great impact on the company’s operations
Even before the option is exercised, the financing agreement already gives SR Accord a significant impact on the company’s activities, which are engaged in the production of chilled salads, and involvement in the management of its business. The terms of the agreement between the parties stipulate that in order to allow SS Accord to monitor the use of the financing funds it provided for Shamir Salads, “several agreements have been set up in the agreement for supervision, control and decision-making”, including the right to determine the company’s CFO and chairman Three members of the board of directors), who have the right to decide on some of the issues of activity.
SR Accord will also be entitled to an “accompaniment and control fee at a quarterly rate of 1.5% of the loan balance, which will be paid at the end of each quarter, in accordance with Shamir’s cash flow capabilities.” Despite this, at the present stage the management of SR Accord “has come to the conclusion that the company does not gain control” of Shamir Salads, and therefore its results will not be consolidated in the financial statements of SR Accord.
Shamir Salads has been in a cash flow crisis for the past year, and it carries debts of more than NIS 90 million on its back, and following the crisis in which it has fallen, it has submitted a request to delay proceedings to formulate a debt settlement, which was approved by the court several months ago.
Shamir Saladi’s shareholders include Sabina Biran, former CEO of Israir, and Rami Ronen, former CEO of Strauss Water, who last year led a group of investors to acquire 50% of the company, and a member of its co-managers Ami Guy and Yaakov Ginzburg (who acquired the company in 2006 ).
The investment was made at the same time as a deal in which Shamir Salads acquired the collapsing competitor, Miki Delicacies, which also operated in the field of production of chilled salads and fish delicacies, for about NIS 6 million. Among the shareholders of Shamir Salads is Osnat Ronen, chairman of the communications company Partner and Rami Ronen’s partner. Shamir Salad owners have invested tens of millions of shekels in it in recent years.
Shamir Salads is engaged in the production of chilled salads and operates through two factories in the Barkan and Ramla industrial areas, and also has warehouses in Be’er Sheva and Haifa. The deterioration in its situation was recorded in light of the corona crisis, which limited its ability to employ its workers, which harmed its production activities and revenues, which as far as is known in the 2019 summary amounted to about NIS 130 million.
Growth in SR Accord – ZIM’s main activity
Adi Zim was previously the owner of the almost free supermarket chain, which he co-owned with his brother Rani Zim. In 2010, the two issued the chain on the stock exchange, and only two years later sold its control to the competing chain Bitan Wines, in a deal that yielded them a value of about NIS 350 million, which completed a capital accumulation of about NIS 420 million in shares, salaries and dividends.
Since then, the Zim brothers’ business path has parted ways, and the two have turned in different directions. SR Accord is the main activity of Adi Zim, and is one of the largest non-bank credit companies on the stock exchange, with a current market value of NIS 800 million, after a 10% increase in its share two years ago, reflecting Zim’s holdings (62% ) Value of about half a billion shekels.
Like most non-bank credit companies on the stock exchange, SR Accord also enjoys a positive period of activity, and in the first nine months of the year showed a growth of about 11% in its revenues, which approached NIS 100 million, along with a climb of about 20% in net profit Its, which crossed the NIS 50 million mark.