RNS Number:0693K
Atia Group Limited
17 December 2007
Atia Group Ltd.
(Formerly: Kidron Industrial Holdings Ltd.)
Developments in the Company's Business since March 2007
Further to the Company's announcement dated 13 March, 2007, regarding the
invitation published by the court-appointed special administrator and trustee
(the "Trustee"), to offer proposals for the acquisition of the Company and/or
its assets, which followed the decree by the District Court of Nazareth for the
stoppage of all legal proceedings against the Company, we would like to update
of the major developments relating to the Company since such announcement, as
follows:
1. In February, as a consequence to the appointment of the Trustee, the
trade in the Company's shares was suspended on the TASE.
2. In June 2007 the District Court of Nazareth approved an arrangement
between the Company and its creditors, which was also approved by the Company's
creditors, the main principles thereof were:
2.1 The sale of the Company's assets and the distribution of the
consideration therefore to the Company's creditors.
2.2 The purchase by Appswing Ltd. ("Appswing"), a private Israeli company,
of the controlling shares of the Company, constituting 75% of its outstanding
share capital, for consideration of NIS 6,900,000. Appswing is a company wholly
owned by CPA Yaron Yenni, which specializes in the acquisition of public shell
companies and inserting new activity into the public shells.
2.3 The purchase by Appswing for symbolic consideration of the rights of
certain of the Company's creditors, which were not included in the arrangement.
2.4 The cancellation of all outstanding options to acquire shares of the
Company.
3. As a result of the creditors' arrangement, the Company was left without
any activity, assets or debts (except the debts purchased by Appswing as
described in Clause 2.3 above). According to the court order approving said
arrangement, no creditor of the Company (other than Appswing with respect to the
debts acquired by it as aforesaid), whether or not known to it, including
shareholders of the Company, shall have any claim, remedy or recourse against
the Company in connection with any act, omission or cause which preceded the
effective date of the creditors arrangement.
4. In September 2007 the Company issued to Appswing 172,232,268 shares in
return for a cash investment of NIS 8.57 million and conversion of the debt
acquired by it as part of the creditors' arrangement into share capital.
Following such cash infusion and allotment of shares, the Company met the
minimum listing requirements of the TASE and the trade in the Company's shares
was renewed in the TASE main list in September 2007.
5. In November 2007 the Company entered into a share purchase agreement with
Emvelco Corporation ("Emvelco"), a public company traded on NASDAQ, and AP
Holdings Ltd ("AP"), pursuant to which the Company committed to issue to Emvelco
and AP 907,934,502 ordinary shares, representing approximately 72% of the
outstanding share capital of the Company, in consideration of the 100% ownership
of Verge Living Corporation ("Verge"), a private company incorporated in Nevada,
U.S.A., and the 100% ownership of Sitinca d.o.o. (LLC) ("Sitinca"), a private
company incorporated in Croatia. Verge is developing a residential real estate
project in Las Vegas, Nevada; Sitnica own property in the town of Samobor in
Croatia, which is designated for residential use. For a description of the
activities of Verge and Sitnica - see Appendix 1 hereto.
6. In July 2007, a general assembly of the Company's shareholders was
convened to approve the share purchase agreement as aforesaid, as well as other
related topics.
7. The notice convening the general assembly disclosed a commission in the
amount of $US 1,000,000 Appswing is entitled to receive from Emvelco and AP, in
connection with the transaction as described above.
8. In October 2007, the general assembly approved the issuance of the shares
to Emvelco and AP pursuant to the share purchase agreement as described in
Section 5 above, as well as the following resolutions:
8.1 Management agreements between the Company and Messrs. Yossi Atia and
Shalom Atia, as described in Section 9 below;
8.2 Directors and officers' liability insurance policy for all of the
Company's directors and officers;
8.3 Indemnification undertaking by the Company for all of its directors and
officers, to the extent permitted under Israeli law;
8.4 Exemption of its directors and officers from liability for breach of
their duty of care towards the Company, to the extent permitted under Israeli
law.
9. Consequently, AP and Emvelco became controlling shareholders in the
Company. Messrs. Yossi Atia and Shalom Atia are the controlling shareholders of
Emvelco and AP, respectively. Messrs. Yossi Atia and Shalom Atia were appointed
as CEO and VP for European activities, respectively, of the Company. For a
description of all the shares currently held by all persons considered
"interested parties" under Israeli law, i.e., holding 5% of more of the
Company's shares or acting as directors or officers of the Company - see
Appendix 2 hereto.
10. Mr. Yossi Atia serves as the company's CEO for a monthly wage with a total
cost to the Company equal to US$ 10,000, and also reimbursement of expenses in
connection with the company's activities. Mr. Yossi Atia will also be entitled
to an annual bonus in the amount of 2.5 % of the net annual revenue before tax
of the Company that exceeds NIS 8 million.
11. Mr. Shalom Atia serves as vice president to the company's operations in
Europe in consideration for a monthly wage with a total cost to the Company in
an amount equal to US$ 10,000 and also reimbursement of expenses in connection
with the company's activities. Mr. Shalom Atia will also be entitled to an
annual bonus in the amount of 2.5 % of the net annual revenue before tax of the
company that exceeds NIS 8 million.
12. Following approval of the issuance to Emvelco and AP new directors were
appointed to the Company's board of directors. For a description of the current
composition of the Company's board of directors and its executive officers - see
Appendix 3 hereto.
13. Commencing in November 2007 the company has started being active in
investments real estate and owns, through its subsidiaries, Verge and Sitnica,
two real estate assets, one in Las Vegas and one in Croatia.
14. On October 16, 2007 the Company submitted a first draft of a prospectus for
raising funds from the public in Israel, based on the financial statements of
the Company as of June 30, 2007. Due to market conditions, the Company has
decided to postpone it's fundraising, and intends to re-file the prospectus
based on its financial statements as of September 30, 2007.
15. In November 2007, the company changed its name to Atia Group Ltd.
Appendix 1
1. The Las Vegas property owned by Verge(1)
The main asset owned by Verge is a property in Las Vegas, consisting of eleven
adjoining sites, with an overall area of approximately 2.87 acres (approximately
13,000 square meters). Verge plans to build 318 condominiums and approximately
3,000 square meters of commercial space. On 30 November 2005, approval was given
by the City of Las Vegas to develop 296 condominium-type residential units and
approximately 3,000 square meters of commercial space. Verge has been approved
to apply for an increase of the number of residential units in the project to
318. This change was initiated to meet the demand for one-bedroom and studio
units.
Las Vegas is Nevada's largest city, and is known for its tourism, gambling,
shopping and vacation centers.
Verge's property is located north of the Central Business District, not far from
the Las Vegas Strip, the famous avenue where many of the city's main tourist
attractions are located. Within walking distance of the project are hotels,
casinos, office buildings, federal courthouse and residential buildings. The
project consists of one nine-storey building, with studio, one bedroom, two
bedroom, three bedroom apartments and luxurious two story loft apartments. In
addition to the residential apartments, the building also includes commercial
space, an underground parking lot for approximately 650 automobiles, 2 swimming
pools, a gym/spa, theater, Pet Park and other amenities for the residents.
Most of the residential buildings located in the area are older buildings, built
during the 1970's. These buildings are occupied mainly by laborers, workers
employed in the service sector, and retirees.
To date, Verge has entered into agreements for the sale of 257 apartments, at an
expected consideration of approximately 95 million dollars.
2. The property in Croatia owned by Sitnica
Sitnica is the owner of the contractual rights to a tract of land in the town of
Samobor in central Croatia with a total area of approximately 74,700 square
meters. (The "Property in Samobor").
The plots making up the property in Samobor were purchased by Atia Projekt in
the months March to May 2007, from various vendors, at a total cost (including
transfer tax) of 65,010,000 Kuna (about $US 12,000,000). Atia Projekt paid 10%
of the price for the plots to the vendors and registered suitable caveats in the
land register at the municipal court in Samobor. The transfer of ownership
rights is not conditional on any action by the vendors, but is only conditional
on payment of the balance of the purchase price. Atia Projekt is a private
company owned by Shalom Atia, one of the controlling shareholders of Atia Group
Ltd.Atia Projekt irrevocably assigned and transferred to Sitnica all its rights
under the purchase agreements.
Samobor is a small town, located about 20 km west of Zagreb, the Croatian
capital, which is the main political, economic and cultural center in Croatia.
The Property is located about two km from the center of Samobor. At present, the
property is vacant land. Sitnica intends to hold the land for investment and
improvement.
Sitnica believes that maximizing the value of the Property in Samobor can be
obtained by building 319 units consisting of apartments and townhouses. The
Company estimates the urban planning process to take about six months and
another six months to obtain a building permit.
The demographic for potential homeowners in Samobor includes middle class
workers from Zagreb who are looking for newer more affordable living outside the
city of Zagreb, young professionals who are looking for an active outdoor
lifestyle, retirees and families looking for a holiday apartment outside of the
city of Zagreb.
Appendix 2
Interested Parties:
Name Number of Shares % Of the outstanding share capital and on a fully diluted basis
Emvelco Corp. 734,060,505 58.3%
AP Holdings Ltd. 173,873,997 13.81%
Yaron Yenni (through Appswing) 230,744,719 18.33%
Appendix 3
List of directors and officers
Name Role
Shalom Atia VP Europe Activities and director
Yossi Atia CEO and director
Yaron Yenni Director
Batia Kahana Avital Director
Ramzi Gabay Director
Iftach Mezer External director
Meir Matana External director
Danny Offer CFO
Sharon Tabib Internal auditor
--------------------------
(1) The general data in this clause relating to Las Vegas is based on
information from the www.economy.com website owned by the Moody's
Corporation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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