Tnuva Food Industries Ltd. has notified Israel Financial Levers Ltd. (TASE:LVR) that it is cancelling the sale of the Cinema City site in Ramat Hasharon. The companies signed an agreement in late July 2008, under which subsidiaries of Financial Levers were to buy the site for NIS 394 million from Tnuva and Hypershuk Ltd. The deal was never closed, despite extensions of the deadline.
Financial Levers asked to extend the deadline for closing the sale to January, when the lender bank would not provide financing until the landowners completed registration of the site in the Land Registry (Tabu), so that the bank could obtain a first lien on the land against the loan.
In recent weeks, Tnuva and Financial Levers discussed the future of the deal, and the closing seemed imminent after Financial Levers obtained agreement in principle from Bank Leumi's (TASE: LUMI) credit committee for a loan of NIS 200-250 million to finance the purchase.
Tnuva apparently cancelled the deal when Financial Levers' controlling shareholder Jackie Ben-Zakan failed to obtain full financing for it. Although Financial Levers today notified the Tel Aviv Stock Exchange (TASE) of Tnuva's cancelation of the sale, and, "termination of the negotiations for closing on the grounds that the buyers intend to change the terms of the deal," Financial Levers apparently believes that this is not the final word in the matter. It added, "At this stage, the buyers are examining its response to the notice, and is also in contact with representatives of the sellers with regard to the notice."
Tnuva and Hypershuk directly own 21 dunam (5.25 acres) of the 24-dunam (six acre) Cinema City lot and lease the rest from the Israel Land Administration (ILA) under a 49-year lease with a 49-year option to extend. Tnuva's part of the lot includes 22,500 square meters of office and commercial space and 4,000 square meters of warehouses. The properties are fully leased.
Financial Levers' share rose 2.8% by midday to NIS 1.01
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2009
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