The share of Azorim Investment, Development and Construction Ltd. (TASE: AZRM), controlled by chairman Shaya Boymelgreen, has risen 310% year to date, the company's finances remain in dire straits. The company posted a net loss attributable to shareholders of NIS 329.4 million in January-September and its shareholders' equity of NIS 261 million at the end of September was less than 4% of its balance sheet total. The company's creditor banks are demanding that it boost liquidity, prompting the sale of Azorim Tourism Ltd. and the sale stakes in subsidiaries to Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL).
Azorim posted a net loss attributable to shareholders of NIS 111.9 million for the third quarter, nearly quadruple the loss of NIS 28.4 million for the corresponding quarter of 2008. The loss was mainly due to subsidiary Lagna Holdings Ltd. (TASE;LGNA), which contributed NIS 70 million to Azorim's loss, as well as the 2.44% inflation rate.
Azorim attributes most of its losses to a NIS 289 million write-down on Lagna, due to value reduction on land and projects under construction of its unit, Engel East Europe NV (AIM:EEE). Additional write-downs were made on Azorim Tourism, whose sale to Fattal Hotel Management Ltd. for NIS 970 million was completed in November. Azorim owned 75% of Azorim Tourism, and Azorim's parent company, Boymelgreen Capital Ltd. (TASE:BMGN) owned the other 25%.
Azorim's financial report for the third quarter does include some glimmers of light. The company has a strong brand in residential real estate in Israel, and it sold apartments for NIS 433 million in January-September, which generated a positive cash flow of NIS 223 million.
Azorim's share rose 2.9% by midday today to NIS 23.11, giving a market cap of NIS 784 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2009
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