Azorim Investment, Development and Construction Ltd. (TASE: AZRM), controlled by chairman Shaya Boymelgreen, has reached a deal in principle with the bondholders of subsidiary Lagna Holdings Ltd. (TASE;LGNA). Azorim will hand over its 51% stake in the company to the bondholders for nothing.
The bondholders will also get Lagna's subsidiaries: Engel Europe Ltd. (TASE: ENGR1 ,ENGR5), Engel Resources and Development Ltd. (TASE:ENRS), Engel East Europe NV (AIM:EEE), and Engel General Developers Ltd., which handles projects in the US.
The deal comes less than a week after Azorim reported that it was in talks to sell Lagna to a Japanese tycoon.
The deal will probably face opposition from Engel Europe and Engel Resources bondholders. The parties will try to resolve their differences as soon as possible so that Azorim can get rid of this failing real estate albatross.
Azorim acquired Lagna at a company value of NIS 600 million in November 2006. Lagna's current market cap is NIS 23 million, and it has NIS 2 billion in debts, including NIS 750 million to bondholders of the company and its subsidiaries. Azorim has injected NIS 500 million into Lagna, and written off most of this investment. Lagna lost NIS 155 million in January-September 2009.
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2009
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