More than a year after signing a merger deal, a company Luzon Real Estate And the People-to-People (P2P) lending platform Tria Approaching the completion of the process. Luzon Real Estate, controlled by the Amos Luzon Group, convened a shareholders’ meeting in the middle of next month, in which a deal will be put to the vote that gives Trea a value of NIS 320 million and will transfer control of the public company to Trea shareholders.
The valuation given to Trea is critical to the merger, as the transaction is conditional on a number of conditions precedent, including receiving a valuation of at least NIS 300 million for Trea and completing the sale of Luzon’s existing real estate operations for NIS 70 million (which will remain cash in the company’s coffers).
In light of the financial results of the lending platform this is not an obvious value. As part of the convening of the meeting, Tria published its financial results for 2021, which it ended with a loss of NIS 6.6 million. This is a reduction in losses compared to 2020, when the company’s revenues were affected as a result of the corona plague (which led to an increase in public deposits and a reduction in the need for loans), in which the loss was almost NIS 13 million.
Betria can draw optimism in light of the growth in revenues in the past year, which amounted to NIS 70.7 million, an increase of about 54% compared to 2020 and an increase of about 28% compared to 2019, before the corona crisis.
The increase in revenues is mainly due to an increase in the company’s credit portfolio, which grew by 23% compared to 2020 and amounted to NIS 2.81 billion. About 83% of the balance of the credit portfolio provided through the platform is backed by real estate collateral and almost all the credit provided from the beginning of the activity through the platform (about 92%) is backed by some kind of security.
A significant step towards the completion of the merger
Tria P2P was founded in 2014 by Assaf Shlosha, Eyal Elhiani and Verde Lusthaus as a private company. Since its inception, the company has been operating in the field of financial technology, ie crowdfunding, and as part of its activities, operates a web platform that enables direct meeting (P2P) between borrowers and lenders.
As of December 31, 2021, the company provided credit totaling approximately NIS 6.5 billion to private and business borrowers, with the company’s profits arising from the collection of fees for the use of the platform, both from borrowers and lenders. The commissions charged by the company from the lenders on average are about 3.2% and the commissions charged from the lenders are about 0.5%.
The average annual return, ie return before tax deduction and investment fees, was 5.16% last year, lower than in 2020 (6.04%) and 2019 (6.3%). The company reveals that about 10% enjoyed an annual return higher than 6.06% but 10% “enjoyed” a return lower than 2.77%.
The convening of the meeting is a significant step towards the completion of the merger and the entry of Trea into the Tel Aviv Stock Exchange. As a result of the completion of the merger and immediately upon its completion, to the extent that it is completed, the shareholders of Tria will hold approximately 72.5% of the merged company and the Luzon Group will hold approximately 19.08% of the issued and paid-up capital of the company. Luzon will be entitled to appoint one director on its behalf, as long as it holds more than 5% of the issued and paid-up capital of the company, and whoever is appointed under the agreement between the parties will be Amos Luzon. To this end, Trea turned to the Commissioner of the Capital Market, Dr. Moshe Barkat, with a request to approve Luzon, as the controlling shareholder in the final chain of the Luzon Group.
The other shareholders in Luzon Real Estate, who currently hold approximately 30.44% of the issued and paid-up capital of the Company will hold approximately 8.2% of the issued capital of the merged company after the merger. , The public will hold about 15.6% of the company’s capital.