Doron Sapir (Photo by Sivan Farage)
Amitim, which manages the investments in the old pension funds, will provide credit of NIS 120 million to the non-bank financing company – Michman. Here the deal becomes more interesting when in addition to financing, members get an option to purchase 7.5% of the company, making it a combined deal that maximizes the power of colleagues as a key entity that finances the company.
In total, Amitim’s members will place an inferior debt of NIS 30 million and a senior debt of NIS 7 and will receive an option for 7.5% of the company, which will be added to a senior debt of NIS 120 million. Michman is interested in using the money to strengthen its capital base and significant growth in the credit portfolio it provides to customers.
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Doron Sapir, Chairman of the Company and Yaniv Bitton, CEO of Michman Business Credit, stated: “We are proud that Amitam chose Michman for a groundbreaking and first-of-its-kind deal for non-bank credit members. The financing agreement and the terms of the options with members “The largest institution in Israel is a great expression of confidence in the potential for expansion of the Michman Group’s activities in the coming years. Providing funding in this unique agreement allows us to continue our rapid growth, as part of building a strong and professional long-term infrastructure.”
Under the agreement, the discounted debt will be inferior to the Company’s Series A and B debentures. The loan will carry a fixed interest rate of 4.9% per annum. The senior credit will bear prime interest + 1.8% (the interest rate may be at least prime interest + 1.6% off and will be provided to the lender for current liens). In addition, the financing agreement stipulates in relation to the debt rebates a mechanism for raising the interest rate in cases of a decrease in the company’s rating and non-compliance with the financial ratios.
In addition, the Company will allocate to the lending entities 127.5 thousand warrants that can be exercised for 127.5 ordinary shares of the Company. The options will be exercisable until July 2023, when the exercise price for each option is NIS 230 and according to a company value of NIS 350 million, 6.5% higher than the company’s value today. As the warrants are exercised for ordinary shares of the company, Amitim is expected to hold Michman’s shares at a rate of approximately 7.5%.
To the extent that the warrants are not exercised during the exercise period by members, the interest rate of the discounted debt will increase by 4%, starting from the end of the exercise period. To the extent that the warrants are only partially exercised, a partial interest increase will apply, respectively. To the extent that the option is not exercised during the exercise period for any reason, the Company will pay, in a one-time payment on the final repayment date, a non-exercise commission option at a rate of 1.9% of the discounted debt fund.
The colleagues were led by Gilad Oshri, director of the non-negotiable credit department, and Roni Horowitz, director of investments in the non-negotiable credit field. The group of colleagues was represented by Adv. Eli Elia, Uri Yitzhak from the Gornitzky firm and Michman was represented by Adv. Yaakov Enoch and Adv. Oded Ofek from the Firon firm.
Michman’s credit portfolio in 2021 amounted to NIS 342 million, an increase of 3.5 times compared to the end of 2020. From the beginning of the year, the portfolio increased by another 33% and at the end of March 2022, it amounted to NIS 460 million. The company’s forecast for the credit portfolio in 2022 amounts to NIS 750 million.
Michman, founded in 2015 by Yaniv Bitton, is a company that provides credit to small and medium-sized businesses in the economy, mainly against receiving delayed messages. As of March 2022, the volume of the credit portfolio managed by the company amounts to approximately NIS 460 million. In February 2021, Michman became a public company with the issuance of its shares to the Tel Aviv Stock Exchange. The company’s chairman is Doron Sapir and the company’s CEO is Yaniv Bitton.
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