Yuli Ofer's CEE buys Inventech; Inventech buys CEE hotels

Inventech is now the real estate company's hotelier.

Central European Estates NV (CEE) (TASE:CNERO.B1) owned by Yuli Ofer and chairman Nimrod Rinot, today closed the acquisition of 74% of Inventech Investment Co. (TASE: IVTC) from Lapidoth Israel Oil Prospectors Corporation Ltd. (TASE: LAPD) for NIS 108 million.

At the same time, CEE sold its subsidiary, CEE Hotel Holdings BV to Inventech for NIS 117 million. Inventech will become the hotel arm of CEE

In late June, Ofer and Rinot forewent a NIS 22.4 million loan to CEE in exchange for equity, in order to halt the deterioration in the real estate company's finances. CEE has NIS 157 million in short-term debt and NIS 646 million in long-term debt. Due to CEE's financial condition, Ofer and Rinot extended it an owner's loan in August 2007.

CEE CEO Dr. Orly Paran said, "We intend to establish a separate platform for our hotel business, which will managed by a top professional team. The acquisition of Inventech will be the foundation for expanding our hotel business, by exploiting opportunities in markets we know in Central and Eastern Europe. We are also not ruling out the possibility of entering the Israeli hotel sector."

Dutch-registered and Hungarian-based CEE has bonds on the TASE. The company posted a profit of NIS 915,000 in the second quarter, and it had shareholders' equity of NIS 43 million at the end of June. The company owns and develops income-producing residential, commercial, and hotel properties in Central Europe.

Lapidoth said that it will report a pretax capital gain of NIS 22 million on the sale.

CEE's bond rose 0.5% in morning trading on the TASE to NIS 0.56. Inventech's share was unchanged at NIS 3.50, giving a market cap of NIS 133 million.

Published by Globes [online], Israel business news - www.globes-online.com - on October 20, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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