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terms, we turned the bonds into a dollar bonds.
The effective dollar interest is very reasonable,
amounting to 6.18%. The repayment of the
bonds will be executed in 8 equal installments,
with an average lifespan of 5 years.
The issuance strengthens the Company’s
balance sheet structure. It transforms us into a
stronger company from a financial standpoint
-
with a decrease in liabilities in the short term,
and offers support for Delta’s growth strategy. Of
course, the bond issuance has also made it easier
for us in acquiring Schiesser, but we could have
made the deal even without the issuance.”
THE SCHIESSER ACQUISITION - FROM
A FINANCIAL POINT OF VIEW
Can you expand on the financial aspects of the
Schiesser Acquisition?
Yossi:
We acquired a company in a very good
condition and at a good price. Schiesser had
experienced difficulties due to the activities of
subsidiaries that led to high losses. The main
one, called Schiesser Lifestyle, was engaged
in the licensing of brands, such as Polo, Puma,
Dockers, Levis, etc. This business, established in
2004,
led to continued losses from its first year of
existence. Schiesser and the owners were forced
to support and finance it, until at a certain point,
they refused to inject more money into the
company. In April 2009, Schiesser entered into
insolvency at its own initiative, which allowed
it to close down the money-losing businesses.
Schiesser was able to get out of insolvency
in December of 2010, due to the profitability
of its core businesses and the strength of the
Schiesser brand.
The process of entering in to insolvency
helped Schiesser restructure the business. The
company’s management implemented many
changes in the business that contributed to its
quick recovery and a return to a good level of
profitability. The main point of this process was
that the strong unit would survive - and that is
exactly what happened.
How did the deal impact Delta from a financial
aspect?
Yossi:
The Schiesser acquisition suits Delta’s
growth and expansion strategy: It increases the
company’s leveraging to a certain extent and
improves its profitability. We estimate that the
acquisition will contribute to profitability in 2012
and the contribution to earnings per share will
be 25-30 cents on annual basis.
Yossi Hajaj
,
and part of Delta’s Finance Department, Tel-Aviv
Delta Has
Joined the Tel
Aviv 100 and
the Global
Russell Index
Yossi Hajaj: “Our next
goal is to join the Tel
Aviv 25 Index!”
Recently, Delta successfully joined the
TA 100 Index, which represents 100 of
the largest public companies in the
Israeli market. When the index was
updated, Delta’s share was ranked #
81 (
The minimum requirement for
joining the index is 85 or higher at
the time of the update). In addition,
Delta joined the Russell Global Index,
which is followed by institutional
investors worldwide, and represents
a value of $3.9 trillion worth of assets.
This means that potential investors
who use the index will now follow
Delta and 8 other Israeli companies
who have joined the Russell index in
June.
Yossi Hajaj
:
Starting June 17th ,
Delta’s share has been included in
the TA 100 index and will benefit
from coverage by a larger number of
analysts and an increase in trade by
institutional investors, mutual funds
and ETFs. All of this could not have
happened without the continuous
efforts of the Company’s associates.
The hard work and motivation
you all put in daily, have led to the
company’s continued growth and an
improvement in its business results
during the past 3 years. The last bond
issuancee, the Schiesser acquisition
and the road show have contributed
to the growing trust of the investors
community in Delta. Our next goal
is to join the TA 25 Index. In order to
do so, we must reach a market value
of $1 billion. I know and believe we
can do it!
"
The issuance strengthens
the Company’s balance sheet
structure. It transforms us
into a stronger company from
a financial standpoint - with
a decrease in liabilities in the
short term, and offers support
for Delta’s growth strategy"
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