The food retail chain Rami Levy Sycamore Marketing has published an amended report regarding the renewal and updating of the terms of the agreement between it and its controlling shareholder, Rami Levy, which includes a reduction in the maximum rent in the framework agreement regarding more than 30 properties it leases from the controlling shareholder. The rent paid by the chain for properties it rents from the controlling shareholder has amounted to more than NIS 190 million in the last three years.
The update also includes a reduction in the rent for the property that the chain wants to rent from Levi in Jaffa, as well as the amount of the fixed component in the terms of Levy’s compensation that the company sought to raise.
All this “following discussions with representatives of institutional investors”, which led to changes “that only benefit the company”, ahead of the shareholders’ meeting that will be requested, which is scheduled to convene next month.
As part of the update that has just been published, the increase in the maximum price of the monthly rent per square meter for properties that the chain rents is reduced by up to 11%, instead of an increase of up to 20% as the company initially sought to approve.
This is a maximum amount of NIS 95 for supermarket and office branches, instead of NIS 100 that the company asked to approve first, which is currently NIS 85, and a maximum amount of NIS 50 for logistics complexes and warehouses, instead of NIS 55 that the company initially approved and NIS 45 today.
These prices are linked to the consumer price index, which has risen since the last agreement was signed between the parties, so that the gap between the new and current maximum amounts is even smaller than shown.
Rami Levy explains that the increase in the maximum rent per square meter is required in light of the rise in prices in the field of income-producing real estate “and the increase in the rent of properties for the purpose of operating supermarket branches in particular.”
The company also decided to leave the monthly management fee that Levy will pay in his position as CEO of the chain at NIS 95,000 per month, instead of NIS 135,000 that it first approved, so that its annual employment cost will remain, according to its estimate based on 2020 data, at about 3.5 million NIS, similar to the current situation, instead of an estimated NIS 4 million.
The Rami Levy food chain, which currently has 55 supermarket branches, has been showing growth in its business for a long time, and its share, which has climbed by about 20% since the beginning of the year, is trading around record levels of NIS 3.5 billion and Levy’s holdings (about 40%). , Together with his delicate wife) a value of about NIS 1.4 billion.