Yishal is a company that holds about one-third of the shares of New Pharm. The company collapsed in the last few months of 2012 and from this period it has been in contact with the bondholders in order to come to a debt agreement. The Yishal Company also has a collateral deposit at Bank Leumi valued at 4.2 million NIS. In addition to this, the company holds approximately 50 percent of the shares of Kamin Real Estate. Kamin holds approximately fifty percent of a real estate company from Latvia, which is in possession of two assets, land in the city of Jūrmala and another asset under lien in Riga. Kamin has also placed its assets under lien to Menorah Mivtachim, in exchange for another loan, but it was unable to comply with the terms and conditions and the loan was declared repayable immediately.

The company had 7 million NIS in cash in its coffers, and 1.85 million NIS were added to this after the sale of the company to the businessman and entrepreneur Eitan Eldar.

The significance of the purchase of a shelf company

A shelf company by definition is a company that has offered shares in the company to the public in the past, but currently, it does not perform any commercial activity or has very little activity. In such situations, new buyers can invest their money in order to become the owner of the company, and in this way cause the value of the shares of the company to rise. In certain cases, the buyer can enjoy significant tax breaks.
By purchasing a shelf company, one can enter the market without an initial public offering, subject to high costs. In this manner, companies that want to recruit capital in the stock market at sums that are below the minimum for initial public offering, can buy a shelf company and inject their activity into them. Afterward, they can recruit capital on the stock market.

The businessman Eitan Eldar is a highly recognized figure in the financial markets. As a part of his activity in the finance market, Eitan Eldar performs brokerage deals for private and institutional investors through the “Arena Capital” company, which he owns.

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• Raising capital – If a company (or private businessman) purchase more than 50 percents of the shares belong to the shelf company, it becomes the controller over the cash reserve of the company. The purchasing party can sthenghten the value of its money and raise capital by offering bonds or allotting stocks.
• Purchasing private companies – Owning a shelf company, explains Eitan Eldar, is a basis for parties interested to purchase private companies and merge with them. This process can increase the value of securities for the investors.
• No need in regulation – People acquire and merge with shelf companies also because there is no need in regulation of minumal recruitment.

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• Becoming a public company – Private company that wants to become public can reduce the cost of public offering by purchasing a shelf company, merge with it and perform a reverse merger. The shelf company is almost empty of content and the purchasing company pours its content into it. Eitan Eldar adds that this is a way to increase the number of potentional investors.
• Savings in the offering process – This process of acquiring a shelf company and pouring into it the new content, saves money in the offering of securities in comparison to initial public offering. It is also a cheap way.

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