Kaldor Properties Ltd., a UK subsidiary of Arazim Investment Ltd. (TASE: AZRM), today paid back Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5) the remaining balance of a loan, which amounted to NIS 44.85 million. Kaldor also gave Phoenix a three-year option on 1.05 million shares at a strike price of NIS 105,000.
The loan repayment will reduce Arazim's first quarter financing expense by NIS 87 million.
In December 2004, Phoenix gave Kaldor a NIS 100 million 15-year index-linked loan at 5.25% interest. Kaldor made interest payments every six months and payments on the principle once a year.
In January, Arazim warned that its financing expenses were NIS 160 million for the fourth quarter of 2008. Its net financing expenses totaled NIS 92.4 million in January-September.
Along with paying back the loan, Kaldor also bought Arazim bonds with par value of NIS 20 million from Phoenix.
The company is expected to make a NIS 400 million write-down on its properties in the UK and Germany in its financial report for 2008, due to be published next week. The company is also expected to report a shareholders' equity deficit, and its auditors may append a going concern warning.
Arazim's share rose 3.9% by early afternoon to NIS 3, giving a market cap of NIS 28 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2009
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