Matthew Bronfman and Shalom Fisher are selling their controlling interest in Olimpia Real Estate Holdings Ltd. (TASE: OLMP), after losing NIS 110 million on their investment less than three years after investing in the company. Bronfman Fisher Real Estate Ltd. subsidiary Isralom Properties Ltd. (TASE:ILOM) owns 27.46% of Olimpia, a property developer in Israel and Eastern Europe.
Isralom and Olimpia said that Olimpia's controlling shareholders have sold shares to Leo Artec Ltd., owned by a Hungarian businessman, which will become part of the company’s controlling core with a 18% stake.
The agreement between Isralom and Olimpia CEO Oskar Katznelson, a controlling shareholder in the company, reflects the scale of Isralom's loss. The deal is at NIS 6.67 per share, 82% less than the share price at which Bronfman and Fisher bought the holding in August 2007 on the eve of the real estate market crash.
In a notice to the TASE yesterday, Isralom described the sale, "The measure is part of Isralom's general policy to liquidate its investment portfolio and to prepare for the possible sale of its investments. The company intends to reduce its exposure to investments in countries with high business risk, such as Romania and Ukraine."
Isralom invested NIS 156 million in Olimpia altogether, and it has written off NIS 75 million of the investment to date. The company will report a further NIS 35 million write off on the investment in its financial report for the fourth quarter of 2009.
Olimpia's share fell 3.6% by early afternoon today to NIS 1.82, giving a market cap of NIS 163 million. Isralom's share was unchanged at NIS 16.90, giving a market cap of NIS 102 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 9, 2010
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