Sources inform ''Globes'' that Scorpio Real Estate Ltd. (TASE: SCRP.B1), controlled by Benny Steinmetz, is in talks with its bondholders to postpone payment of the principal on its bond by five years. The principle is due to mature in January 2010; Steimetz is seeking a postponement until 2015.
The bondholders' representative body comprises Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Menorah Mivtachim Holdings Ltd. (TASE: MORA), and Psagot Investment House Ltd. They have all signed confidentially agreements with Scorpio to prevent leaks to the media about the debt settlement.
The sources added that, in addition to postponing payment on the principal, Steinmetz intends to make a large capital injection into Scorpio. The financial institutions are demanding Scorpio shares for agreeing to a deal, and this is one of the issues under discussion. The parties are also negotiating the interest on the bonds in compensation for the postponement.
Adv. Ram Caspi and Pinchas Rubin represent Scorpio in the negotiations. Yigal Arnon & Co. managing partner Adv. Yigal Arnon represents the bondholders. The bonds' trustee is Hermetic Trust (1975) Ltd.
The capital market appears to be optimistic that a debt settlement will be reached. Scorpio's bond price has risen 26% in the last month alone to NIS 0.59, giving a market cap of NIS 304 million. The company has no shares traded on the Tel Aviv Stock Exchange (TASE).
Scorpio has a shareholders' equity deficit of NIS 117 million, a working capital deficit of NIS 443 million, and NIS 1.95 billion in liabilities.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009