Berggruen Residential Ltd. (TASE:BRGN.B1) owner Nicolas Berggruen and his partners Hagag and Cohen, are selling properties in effort to boost the company's liquidity. The company has sold a building at 5 Nahalat Binyamin Street in old Tel Aviv to an unnamed buyer for NIS 11 million. This is the eighth building in the area that the company has sold lately, barely two years after buying them.
The buyer will assume the building's mortgage. Berggruen said that it did not expect to report either a capital gain or loss on the sale.
Berggruen bought eight buildings slated for preservation in the Nahalat Binyamin area in 2007 for $50 million in July 2007, and launched a preservation and renovation project for them. The buildings were built in the 1920 as private residences, and over the years were converted to businesses and apartments. The company is focusing its efforts on building the nearby Meier on Rothschild luxury high-rise at the corner of Rothschild Boulevard and Allenby Street.
Berggruen Residential's auditor, BDO Ziv Haft noted that the loan covenants for the Meier on Rothschild project stipulate additional loans were contingent on the company raising NIS 27-36 million, or else the bank may demand immediate repayment. Berggruen Residential had a shareholders' equity deficit of NIS 68 million in June, after losing NIS 11.2 million in the first half of the year. The company is due to pay the banks NIS 29.7 million in the coming year, as well as NIS 24 million in payments on its bond.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2009
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