Realtec Assets and Buildings has sold its holding in the company that owns the 159-room Holitel Siesta Hotel Eilat (formerly the Mirage Hotel) to Gmul Investment Co. Ltd. (TASE: GMUL) for $2 million and the assumption of the hotel’s $8.5 million debt. Gmul has made a $500,000 down payment on the acquisition. Gmul’s announcement said that Dan Goldstein indirectly controlled the hotel. Sources believe that the hotel is valued at $16 million in Realtec’s books.
Gmul announced yesterday that it may continue the existing financing arrangements at the hotel, replace them with other arrangements, or, if bank financing cannot be arranged, finance the deal from its own resources.
The company that owns the hotel has lease rights to the 3.5-dunam (0.875-acre) hotel site. Gmul stated that it planned to operate the hotel. With the help of recovery in tourism, the hotel has begun making an operating profit in recent months.
The acquisition is Gmul’s second in the hotel industry in the past two weeks. The first was the purchase of control in the 160-room Tsell Harim Hotel for NIS 23 million (NIS 15.5 million, plus assumption of a NIS 7.6 million loan). Gmul said yesterday that it was also considering other hotel acquisitions. Tsell Harim owns lease rights to its 15.5-dunam (3.75-acre) site, located in the Ein Bokek hotel area at the Dead Sea. Gmul added the hotel has construction rights for an additional 60 rooms.
Gmul plans to develop a chain of 3-4-star hotels in Israel in order to appeal to people unwilling to pay for five-star hotels.
Realtec, which formerly owned the Bluebay Hotel in Netanya and a hotel in Jerusalem, in addition to the Siesta Hotel, was delisted from the Tel Aviv Stock Exchange in 2003.
Published by Globes [online] - www.globes.co.il - on September 6, 2005