Rami Levy has withdrawn from negotiations to acquire the Nof Zion residential project in eastern Jerusalem owned by Digal Investment and Holdings Ltd. (TASE: DIGL). Supermarket owner Rami Levy and his Australian Jewish partner Kevin Bermeister planned to acquire Digal's assets, including Nof Zion and Kilas Investment Corporation, for NIS 123 million.
Rami Levy's withdrawal could reopen the door for Palestinian developer Bashar al-Masri to make a new bid for Nof Zion.
In a notice to the TASE, Digal said that the buyers informed it, "There were material differences between the information provided by Digal about the assets up for sale and the findings of the due diligence." Digal denies the allegations.
Digal also said that, on the basis of the investors' offer in January, it had reached a debt settlement with its largest creditor, Bank Leumi (TASE: LUMI), which the bank approved in March.
In January, Levy and Bermeister announced that they would take over the Nof Zion project in eastern Jerusalem, near the village of Jebel Mukhtar, following the outcry when al-Masri bid to acquire the project. The controversial project targets the religious community. Only 91 of the planned 395 apartments have been built after Digal fell into financial difficulties. It owes the banks and bondholders NIS 240 million, and it had a shareholders' equity deficit of NIS 18 million at the end of June. Before al-Masri's identity was known, Digal's bondholders had agreed to his NIS 36 million offer for the bonds, which amounted to 60 agorot per shekel.
Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2011
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