FBC represented the Sky Fund and Tama Investments and Finance Ltd., of the Clal Industries Group, (“Tama”) in a complex share exchange transaction between the company Cargal Ltd. (“Cargal”) and Plasto-Sac Ltd., a publicly traded company on the Tel Aviv Stock Exchange (“Plasto-Sac”) which is in the business of flexible packaging and corrugated fiberboard.
At the closing of the “as is” transaction, Cargal will sell most of its holdings in Plasto-Sac (around 81%) to all of its shareholders, including the Sky Fund and Tama (as well as to the Bereshit Fund, C.I. Industries Ltd. and more) (hereinafter “the Shareholders”).
Against the sale of the Plasto-Sac shares, Cargal will make vendor loans available to the Shareholders, pro-rata according to the Shareholders’ holdings of Cargal’s share capital, immediately before the completion of the transaction.
In parallel, the Shareholders will sell most of the issued and paid up shares of Cargal to Plasto-Sac, in exchange for Plasto-Sac shares which will be allocated in a rare private placement that will constitute, immediately following their allocation (subject to changes that will occur following an allocation, exercise or expiration of Plasto-Sac options until the date of the completion of the transaction), around 54.41% of Plasto-Sac’s issued and paid up share capital and voting rights. Further, Plasto-Sac will take over the vendor loans that Cargal made available to the Shareholders.
Plasto-Sac entered the transaction, following the recommendation of a special independent committee that Plasto-Sac’s Board of Directors formed. The committee had the input of economic and legal advisors, who presented a legal and financial due diligence of Cargal as well as a valuation.
In the framework of the transaction, different issues arose, including the maintenance of the minimum public shareholding in Plasto-Sac, and an assessment of the Shareholders’ rights to sell the shares to be allocated to them by Plasto-Sac in the private placement free from the restrictions in section 15(C) of the Securities Law regarding the resale of securities.
In this context, Plasto-Sac undertook to publish a shelf offering report, to be signed by an underwriter, pursuant to which, among other things, the Shareholders will have the right to sell the Plasto-Sac shares to the public in order to ensure the minimum rate of public ownership required by the listing regulations of the TASE.
In addition, Plasto-Sac undertook to endeavor, subject to all laws and the guidelines of the Israel Securities Authority, to release the shares allocated to the Shareholders from the restrictions on the resale of securities.