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IntelGenx Technologies Corp. Message Board

ofir_menkes 18 posts  |  Last Activity: Jun 24, 2015 4:20 PM Member since: Jul 27, 2008
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  • Reply to

    Elbit Conundrum - locked out of heaven...

    by ofir_menkes Apr 16, 2015 7:02 AM
    ofir_menkes ofir_menkes May 9, 2015 6:40 AM Flag

    Yes, Chennai is going to be developed before Bangalore.
    The partner for Bangalore is Mantri, which a large builder. the 20% IRR is in Rupee, so in
    Dollar terms it is 13.8% (from 2009 to today the rupee went from 1/48 to 1/64 of a dollar) / year.
    Elbit people believe that Mantri will act in accordance to the term sheet (which is not a formal
    agreement). Mantri will start developing the land next year in phases. I will tell you that the Chennai
    deal is much more simple. it is also much smaller. if you assume 1200rupee/sqf *75 acres
    (only 80% is plots - rest is roads etc.), you will have $24M as Elbit's portion. it will be mostly a
    return of capital. Plaza will get the same. selling plots is much easier. I assume 1500 price as it is
    10% bellow market. Bangalore is much bigger (epi owns or paid for 108 acres) and the area
    sells at ~ 2500 rupee/sqf. assume 2000 and 80% salable land. using those parameters, the
    part of Elbit should be at least $58M. that would be at selling well bellow market (Mantri is
    usually a premium name). according to the framework, the value would be now $94M.
    Keep in mind that each of those two items is equally owned by Plaza, so it would increase
    Elbit's value of its 45% in Plaza. Elbit's share should be $80M. so is Plaza's share.
    The question is when. the good thing is that a return of capital does not get taxed...

  • Reply to

    Goldman Sachs and EMITF???

    by starteam003 May 14, 2015 9:03 AM
    ofir_menkes ofir_menkes May 14, 2015 11:10 AM Flag

    what are you talking about?

  • Reply to

    New Here

    by joejoepepitone May 21, 2015 2:47 PM
    ofir_menkes ofir_menkes May 27, 2015 5:31 PM Flag

    The only India assets in the JV are the lands in Varthur, Chennai and whatever
    Kochi is worth.
    The Hotel in Romania is actually a complex of hotels. the Radisson has 424
    rooms and then the new Plaza inn will have 210 rooms (starting q3 2015)
    instead of 165 apartments (today). there are more rooms/apartments, but the
    major overhaul will be finished this year.
    The land in Tiberius should be worth a pretty penny.
    Good luck to the company.

  • ofir_menkes by ofir_menkes May 28, 2015 4:14 PM Flag

    Most importantly - cash:
    Company has 85M Euro consolidated, but only 41 of which is Plaza. means company has ~40M Euro
    (probably a bit less). once the Anwerp hotels are sold, add 22M Euro and reduce 5M Euro of debt.
    For sale - their land in Tiberius is on the block and should generate well over cost (12M Euro).
    Second - debt:
    Company has 870M NIS (203M Euro) of debt. once deal with KKR closes, reduce 5M Euro.
    Mortgage debt (out of corporate) will be left only for Bucharest hotel.
    Expected development this year:
    Novartis has an option until end of 1H 2016 to purchase Gamida Cell (20% net owned by Elbit) for
    $200M + future milestone payments up to $435M. unknown about royalties.
    Elbit Medical (who owns Gamida and is 82% owned by Elbit) owes Elbit $35M which should be paid once
    Novartis exercises its option (invested already $35M in Gamida). assuming Gamida's Nicord finishes
    its phase 2 (as expected based on initial indications).
    Insightec is finally succeeding in getting insurance companies in the u.s on board. the company was stuck
    at about $20M of sales. they also lately released a 1.5T version (its a big deal - most MRI machines are
    not the expensive 3T, but the cheap 1.5T and Insightec was not present there).
    Insightec is net 30%-35% owned (depending on revenues 2015-2016).

    Elbit's bonds are trading at a discount and each buyback of it would add to equity -
    Serie H is trading at 88 cents, inflation adjusted value 105 cents - about 480M NIS.
    Serie I is trading at 58 cents, inflation adjusted value 110 cents - about 240M NIS.
    The only debt that can not be bought at a profit is the $43M debt to the bank.

    Assets for sale:
    ~10 Acres in Tiberius. cost was 12M Euro in 2007. worth - much more today. limited for hotel only.
    very few hotels added by the sea of Galilee over the last 30 years.
    In 2016:
    Bucharest hotel complex will be ready
    India lands are well discussed already.

    Sentiment: Strong Buy

  • Reply to

    Q1 Notes :

    by ofir_menkes May 28, 2015 4:14 PM
    ofir_menkes ofir_menkes May 29, 2015 5:35 AM Flag

    Lets hope so. if that happens, Elbit will be sitting on over 350M NIS. I hope they are buying back
    their bonds on the open market.
    Good luck to us.

  • Reply to

    Q1 Notes :

    by ofir_menkes May 28, 2015 4:14 PM
    ofir_menkes ofir_menkes May 29, 2015 11:35 AM Flag

    The trial you are talking about uses Nicord in addition to another dose. the interesting
    trial is the one that uses Nicord alone. that removes huge amount of cost from the
    procedure and moved frozen would remove more cost as well.

  • Reply to

    New Here

    by joejoepepitone May 21, 2015 2:47 PM
    ofir_menkes ofir_menkes Jun 2, 2015 10:37 AM Flag

    One can justify almost almost any number. one of the beauties
    of modern accounting...
    I believe the value of Elbit over time will be much more than
    $3 per share. this is an investment company in assets that is
    much closer to a fund than to an operating company. you
    should be looking at its individual assets and their performance,
    not at the whole.

  • Reply to

    New Here

    by joejoepepitone May 21, 2015 2:47 PM
    ofir_menkes ofir_menkes Jun 2, 2015 10:48 AM Flag

    Blu, couple of things:
    The Bucharest complex carries over 60M Euros of debt. the
    64M is the equity, so the valuation is ~130M.
    When you look at net income of an asset that is levaraged and
    not optimized yet, you are better off looking at the EBITDA.
    The EBITDA today is over 10M Euro. it will grow once the
    additional 210 rooms are available and another 1.5M of capex
    is put into the hotel this year (other than the conversion).
    The additional appreciation will not be huge to the total price
    tag, but will be all equity. as the Romanian economy becomes
    better (and especially among the Bucharest area), the casino
    there should do better an so do the two hotels and the other
    apartments. if they could sell in a year for over the current
    valuation, they could payoff the Bank debt with leftover.
    Their bank debt is in Dollars, so selling once the Euro is a bit
    stronger will make a lot of sense. keep in mind that only 77%
    belongs to Elbit.
    Good luck to the company and to us.

  • Reply to

    New Here

    by joejoepepitone May 21, 2015 2:47 PM
    ofir_menkes ofir_menkes Jun 2, 2015 12:09 PM Flag

    This is a problematic piece of land with large potential. its
    development has been resisted by greens, but it is a large
    piece of land that is currently designated for a very high end
    boutique hotel (it was designated before for 800 rooms, but
    now only around 200 ultra high end).
    I do not believe any new hotels were developed in the area for
    the last quite a few years. some were renovated, but not new
    ones and not very high end.
    I think the cost was 50M NIS and the prices of land in Israel
    since 2008 have gone up over 200% for residential. I do not
    know the pricing for hotel parcels.
    Anyway, I hope that somewhat helps.

  • Reply to

    The (only) positive point

    by dubi_calmy Jun 3, 2015 9:18 AM
    ofir_menkes ofir_menkes Jun 3, 2015 5:55 PM Flag

    Novartis seems to not want to control other companies. they want to share profits and finance research,
    but not to straight up buyout the company. it sounds like a strategic thing.
    Gamida Cell has a lot of the $35M Novartis injected, so they should be able to progress for awhile, but the
    risk is higher...

  • Reply to

    If doesn't close above 11.20 next week

    by nyxout Jun 6, 2015 3:03 AM
    ofir_menkes ofir_menkes Jun 8, 2015 5:19 PM Flag

    Debt grows as you grow and have to hold more inventory and do more shipping and
    build infrastructure. the question is if the cashflow is there to pay down the debt over
    time. I think it is there.

  • Reply to

    Novartis will Pay $ 142 M Breakup Fee

    by kodakbond Jun 9, 2015 12:35 PM
    ofir_menkes ofir_menkes Jun 9, 2015 4:24 PM Flag

    Please stop. that was an option, so there will be no breakup. if the transaction would have taken place,
    the amount of 142M NIS would have been paid by Elbit Medical to Elbit Imaging in order to pay back the
    existing shareholder's loans.
    Gamida cell still have money to run its trials (whatever is left from Novartis's $35M) and Novartis said
    they are looking to continue collaborating with Gamida Cell (AKA finance for product development).
    They are interested in Nicord and the technology other applications, but they have no desire to own
    Gamida Cell outright. for better or worse, that is where we are.

  • Reply to

    menkes or anybody

    by starteam003 Jun 11, 2015 8:22 AM
    ofir_menkes ofir_menkes Jun 11, 2015 11:11 AM Flag

    No, there was a 21M Euro mortgage. they get 27M Euro, from which they pay 5M towards their bank debt
    and they pay 15M Euro towards buying the rest of the Bucharest complex.
    They have a net increase of 7M in their cash and they will use it for general corporate purposes (
    including interest payments).

  • Reply to

    menkes or anybody

    by starteam003 Jun 11, 2015 8:22 AM
    ofir_menkes ofir_menkes Jun 12, 2015 11:27 AM Flag

    A lot of rooms (was 424 and will be at q3 424 + 210) plus some more apartments.
    The other revenues (non boarding revenues) are high and with more rooms at higher
    class level, they can increase revenues. revenues have been stagnant for two years.
    Romania's economy is the fastest growing in Europe and it is growing on real products
    and not financial engineering, which is good.
    I think that so far this year, tourist numbers have gone up by more than 10% over last
    year. that should help the results as well.
    With increased EBITDA (currently 10M Euro) the value should go up and the hotel
    complex should be able to pay the 6M expense for the upgrade while hardly increasing
    its debt.
    That has to count for something...

  • ofir_menkes ofir_menkes Jun 19, 2015 10:48 AM Flag

    It does says a lot, but it should:
    1. Describe the Romania hotel complex better (the largest asset now of the company).
    They probably should provide guidance of what they believe the EBITDA running rate should look like
    next year (based on the fact that they will finally have 210 rooms at 4 starts level which are not active
    today - and have not been for a while now). they need to explain what parts of the complex need to
    still be renovated after this and what is the timeline for that.
    right now:
    424 rooms at Radisson Blu - 5 stars.
    210 rooms at Park Inn - 4 stars (?) - will become active 4q of this year. was called Center Ville and
    most reviews of its 165 apartments were not good (understatement). wonder what the renovation
    will do to the EBITDA.
    129 other rooms/apartments - trying to figure out still what is their status. are currently part of
    Center ville complex (which included 294 before).
    2. Lands in Chennai - what is the status as far as timeline for project to start and when will cashflow
    start coming out of it (as building progresses and nearing delivery).
    40% of 90 Acres are a lot of money.
    3. Lands in Bangalore - Varthur area (not sure if part of Varthur, but close enough to the lake). what is
    the timeline for Manti to build and when will cash flow start.
    50% of 108 Acres is a huge sum of money.
    4. Nothing was said about the land in Tiberius.

    Good luck to the company and to us, its stakeholders.

  • ofir_menkes ofir_menkes Jun 19, 2015 3:55 PM Flag

    Years ago Elbit Imaging owned a company called Elscint, which was one of the top
    competitors of GE medical in CT. GE purchased it, but it did not want to deal with the
    (then) young insightec, so Elbit kept it.

  • ofir_menkes ofir_menkes Jun 24, 2015 12:22 PM Flag

    You should chill out... this is a long term proposition. everything is happening slowly.
    If you noticed from the last reports, Elbit paid 15M Euro to consolidate the Radisson Complex under their
    The complex was purchased using total value of 130M Euro and hopefully would be worth more in a year.
    The value includes 65M Euro of debt.
    Another interesting thing is that an asset called Cina Plaza, which was leased to Plaza Centers for 49
    years by Elbit (starting 2007) would be returned to Elbit (for compensation to Plaza).
    This is a piece of land to be developed into 5000 sqm of retail in one of the best streets in Bucharest
    (Calea Victoriei Venue - next to some of Bucharest's most well known landmarks).
    I do not know how much the value is, but it has to be quite a bit. would help in paying debt down...

  • ofir_menkes ofir_menkes Jun 24, 2015 4:20 PM Flag

    in 4 years they will finish paying the last of their debts. whatever is left at that point will
    be pure equity. I suspect this will be quite more than today's price.
    when will the market recognize the equity value? maybe when and if they sell the
    Bucharest assets or the India lands or have Plaza much less levaraged or when they
    monetize Insightec or when they monetize Gamida cell or sell the 10 Acres by the sea
    of Galilee. all of the above could do the job.
    Simple answer - nobody knows. the market is based on emotions and fears more than
    on rational. good luck to us.

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