June 8th, 2022 – 05:24 PM
Electra (+0% 5710), Bar-Ilan University, and Bank Hapoalim (+5.3% 3318) have signed a renewed funding agreement today for the dorms project at Bar-Ilan. Bank Hapoalim will grant a 400 million shekels funding to Electra and Bar-Ilan. In March 2016, Electra, of the Salkind brothers’ Elco group, won a tender for the establishment and operation of Bar-Ilan University’s dormitory and service center for 24 years.
The project was completed in 2020 and included the renovation of the old dorm buildings and the construction of two new towers at the northern end of the campus. This has created a students’ village with approximately 1700 beds near a parking lot and a shopping center. The project began its operation in October 2020. Electra received 365 million shekels funding in 2017 from a banking corporation and two institutions for the project. The funding was raised to 394 million shekels in 2019. Electra estimates that the annual income from the project will amount to 33 million shekels.
In its 2021 annual report, Electra has noted that the company has signed a compromise agreement with Bar-Ilan University due to the increase in costs and loss of revenues from the project, probably due to COVID-19 and other allegations voiced by the university. The compromise agreement has set a one-time 50 million shekels payment to Electra and has established the mechanism for splitting the profits between Electra and Bar-Ilan University. Electra has noted in its annual reports that, due to the compromise agreement, it will re-evaluate the project’s credit.
Electra is traded according to a net worth of 6.95 billion shekels and the company’s share has decreased by approximately 17% from the beginning of the year. Electra operates in five sectors: construction and infrastructure projects in Israel; construction and infrastructure projects abroad; operation, services and maintenance; development of planned real estate; and the franchising sector. The franchising sector, which also includes Electra’s activity in the field of public transportation through Electra Afikim, had an operating profit of 15 million shekels in the first quarter of 2022, while the same quarter in 2021 has yielded 300 thousand shekels.
Zohar Yinon, Senior Vice President and Bar-Ilan’s CEO, has stated: “We have walked through a complicated path with Electra in several ways, and I am glad that today we are implementing a significant phase in the project that benefits the university, the franchiser, and most importantly- the students.”
Dov Kotler, Bank Hapoalim’s CEO, has stated: “The real estate market is going through transient times and I believe it needs to stabilize. We play a significant role here and therefore, we follow the tenders, hoping that things would stabilize.”
Itamar Deutscher, CEO of Electra Group: “The current project is the orchestrator of a real partnership between the public and private sectors. We have succeeded in coping with the challenges and the different points of view and found a true partner in Bar-Ilan University.”