Tshuva's rescuers: Avi Shemesh, Shaul Kuba
Los Angeles real estate firm CIM, which specializes in developing derelict business centers, negotiating acquisition of Delek Real Estate
Shemesh and Kuba founded the real estate investment fund in 1986 and it has since become one of the largest funds of its kind in Los Angeles, managing assets worth some $5 billion.
Privy to the connection between Delek Real Estate and the American fund are former head of the ISA corporate finance department Moshe Barkat, who is currently chairman of Delek Group's Phoenix Holdings, and head of ADO Shlomo Zohar.
Shlomo Zohar's involvement
At the end of 2010, CIM Fund signed a deal with Tamir Sapir's Sapir Group for the refunding of the Trump Tower in Soho in Manhattan. The $290 million funding was originally granted by ISTAR Bank and upon agreement with CIM, the bank debt was cut to $170 million.
The debt to ISTAR is first lien and was rescheduled for several years in return for higher interest rate. The debt to CIM is second lien and partners – the Sapir Group (60%) and the Trump Group (40%) have third claim on earnings from the project. Shlomo Zohar led his arrangement as well.
CIM specializes in giving abandoned business centers throughout the United States facelifts, redeveloping them into trendy residential and recreational areas. CIM has a diversified real estate portfolio which includes Investments in mid town Los Angeles, Hollywood, Las Vegas and a plethora of development projects throughout the US.
In the past CIM examined entering a partnership in the Herzliya Arena shopping mall owned by Moti Ziser but the deal did not come to fruition.
"It will be interesting to see them joining Delek Real Estate without giving bondholders a haircut. I doubt it can be done," a source acquainted with the two told Calcalist.
However, Delek Real Estate explicitly stated in the memorandum of understandings with CIM that the deal is contingent on full repayment of the principle and interest to the bondholders.
Two years ago, Kuba and Shamash gained unfavorable exposure due to an investigative report by the Los Angeles Times questioning the relationship between the two and the former Markstone Fund chairman Elliott Broidy who admitted to having taken a bribe.
Furthermore the article described the relationship between CIM and Los Angeles deputy mayor Alfred Villalobos who was one of the original founders of the fund, alleging that Hollywood-based CIM transferred $16 million to Villalobos to ensure investments in CIM's projects.
Two weeks ago, Delek Real Estate reported that it was holding talks for teaming up with a foreign investor the name of which it did not disclose. The investor was to pour some NIS 500 million ($138 million) into its cash box in return for the control over the company.
Under the deal's terms, Tshuva was to waive a NIS 120 million ($33 million) debt repayment and hand over control to the fund without compensation.
The parties signed a memorandum of agreements under which the acquirer will have a 60 day time-frame in which it would try to formulate an arrangement with Delek Real Estate's bondholders.
Tshuva left for New York last Wednesday to meet Shemesh and Kuba in an attempt to finalize the deal. He was joined Sunday night by his right hand man Idan Wallace and Delek Real Estate chief Eran Meital.
Estimates are that the deadline on the negotiations will be deferred by several days. Tshuva's group declined a response and refused to comment in any way on the identity of the prospective buyers.
Click here to read this report in Hebrew
- Follow Ynetnews on Facebook
