Isralom Properties Ltd., owned by Matthew Bronfman and Shalom Fisher is in talks to sell its stake in Beit Havered in Givatayim for NIS 48.5 million. A deal is subject to due diligence by the buyer. Isralom will report a net cash flow, after repaying loans of NIS 15 million, and a capital loss of NIS 500,000, if a deal is closed.
Isralom's share of Beit Havered is 1,500 square meters of office space and 300 parking spaces, storage and other space. The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) own most of the property.
The talks are part of Isralom's sell-off of properties, as Bronfman and Fisher seek to turn the company into a holding company. In the past year, it has sold properties for hundreds of millions of shekels, and still owns some properties in Israel. The company has also bought 19% of Shufersal Ltd. (TASE:SAE) for several hundred million shekels, and bought 85% of Palace Industries (PI) Ltd. (TASE: PLND) from Bronfman and Fisher. After Bronfman and Fisher delisted Isralom from the Tel Aviv Stock Exchange (TASE), it only has three bond series registered for trading.
Isralom's financial condition is still poor, after its net loss doubled to NIS 38 million in the first half, due to sharp rise in financing costs. The company swung to a shareholders' equity loss of NIS 4 million at the end of June. After failing to meet its financial covenants, Isralom's current liabilities soared to over NIS 1 billion, mostly bank credit and a NIS 105 million loan from private equity firm KCPS & Co.. The company said in its financial report that it has reached understandings with the banks to amend its financial covenants.
Isralom has NIS 86 million in cash and cash equivalents, and its assets are valued at NIS 308 million. Its bond debt is NIS 214 million. Last week, Bronfman announced a NIS 10 million buyback of bonds to support the company.
Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2011
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