"I'm out NIS 420 million on the acquisition of Gmul just a year ago. I've made any number of deals in my lifetime, and this was the worst deal of my life," Gmul Investment Co. Ltd. (TASE: GMUL) controlling shareholder Leon Recanati told the company's bondholders today.
Gmul was given a going concern warning by its auditors, which was appended to the company's financial report for the third quarter of 2008. The company lost NIS 179 million in January-September. Its shareholders' equity was just NIS 163 million at the end of September and its debts exceeded NIS 1 billion.
Gmul fell 0.1% today to NIS 0.99, giving a market cap of NIS 35.7 million. Its market cap at the time of Recanati's acquisition was NIS 600 million. The company's bonds have a yield of 490%.
Gmul's bondholders were unimpressed by Recanati's mea culpa. "You invested no money in the company, you've nothing to offer the bondholders, and the company is not offering to buy back its bonds. If you're optimistic that the company can emerge from the crisis, why don’t you make an owners loan," said a bondholder.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2008
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