Ma'ariv parent looks to new bond issue

Israel Land Development plans to raise NIS 100 million in bonds.

Three weeks before Ma'ariv Holdings Ltd's (TASE: MARV) upcoming bond payment, its parent company Israel Land Development Company (TASE: ILDC) today announced that it plans to raise NIS 100 million in an offering of bonds, which will be backed by guarantees.

In a notice to the Tel Aviv Stock Exchange (TASE), ILD said, "Proceeds from the offering will be used to finance current operations, in accordance with decisions of the company board of directors as made from time to time, including the recycling of loans."

ILD, controlled by chairman Ofer Nimrodi and his father Jacob Nimrodi, has real estate, publishing (Hebrew daily "Ma'ariv), billboard advertising (through Rapid Vision Ltd.), and hotels (through ILD Hotels Ltd (Hachsharat Hayishuv Hotels Ltd.) (TASE:HAHO)) interests. The company's revenue of NIS 681 million in January-September 2009 was 15% less than in the corresponding period of 2008, and it posted a negative cash flow of NIS 49 million.

ILD's income-producing properties in Israel include the Seven Stars Mall in Herzliya, and Beit Kalka and Beit Ma'ariv office building in Tel Aviv. The company also owns a 33% stake in Canadian property developer Skyline International Inc., and owns properties in Poland and Romania.

Standard & Poor's Maalot Ltd. has given Israel Land Development's bonds a BBB rating with a "Negative" outlook. Maalot favorably cited the company's keeping its debt to equity ratio, and the improvement in the valuation of its assets and cash flow. However, it unfavorably noted developments at Ma'ariv Holdings. "Ma'ariv has no source to repay its upcoming bond, and it will need a capital injection from outside sources, including relying on ILD. The negative outlook reflects the uncertainty about Ma'ariv's streamlining plan, and the company has not yet achieved operational profitability, and continues to burn cash."

ILD's share rose 3.5% by early afternoon to NIS 19.03, giving a market cap of NIS 500 million. Ma'ariv Holdings' share rose 3.9% to NIS 5.17.

Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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