Holyland Park Ltd. has not met its sales target for its Holyland residential project in Jerusalem, according to a previous shelf prospectus published by Kardan Israel Ltd. (TASE:KRIS), which owns 30% of the company through subsidiary Kardan Real Estate Initiative and Development Ltd.
Holyland Park's other shareholders are Polar Investments Ltd. (TASE: PLR), with a 60% stake and Bank Leumi (TASE: LUMI) investment bank unit Leumi Partners, with 10%.
The Holyland project located in the Bait Vegan neighborhood in Jerusalem, is due to include 996 apartments. An adjacent 16,200-square meter lot is zoned for a hotel, but the company is considering applying to rezone it for residences as well. The lending bank has the right to demand immediate repayment of the loan for the project if it believes that sales are flagging well below projections, or if it believes that there has been a material breach of the loan covenants.
Kardan Israel says that the bank has not notified the company that it wants faster sales in the project, or that it is planning any other measures.
Holyland Park's debt was NIS 529 million at the end of September 2009, of which NIS 294 million includes guarantees. In early November, Kardan Israel chairman Eitan Soroka said that 700 apartments in the project had been sold.
The financial report for the third quarter of 2009 by Polar Investments states that its revenue from the project's sales totaled NIS 55.3 million. During the third quarter, the company obtained an occupancy permit (Form 4) for building 16 of the project, and that 38 of the 68 apartments sold in the building had been handed over to the buyers.
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2010
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