Central European Estates NV (CEE) (TASE:CNERO.B1), controlled by Yuli Ofer's widow, Ruth Ofer, has rejected a demand by Lapidoth Israel Oil Prospectors Corporation Ltd. (TASE: LAPD) for early payment of NIS 16.8 million for the balance of its holding in Inventech Central Hotels Ltd. (TASE: IVTC), a CEE subsdiary.
Lapidoth, controlled by Yaakov Luxembourg, made the demand on Sunday, apparently because of Yuli Ofer's death in September. The company contends that the change in the identity of CEE's controlling shareholder allows it exercise its option to compel CEE to buy Yelin Lapidoth's 11% stake in Inventech18 months early at triple the market price.
CEE bondholders are also worried about the future of the company, which until now was supported by Yuli Ofer. The bond price has fallen 20% since his death, sending the yield to over 100%. Just two months ago, CEE paid bondholders NIS 47 million after Ofer injected NIS 40 million into the company.
At the solo level, CEE has few debts to banks or other creditors, except for NIS 110 million owed to its bondholders. Nonetheless, it is not in good shape, with a shareholders' equity deficit of NIS 91 million at the end of June 2011 after losing NIS 22.4 million in the first half of the year and NIS 92 million in 2010.
Yuli Ofer owned 46% of Premium (PIH) Holdings Ltd. (TASE: PIH) owns 95% of CEE, which in turn owns 68% of Inventech.
CEE's bonds bear 7.8% annual interest. They repaid in equal annual payments through September 2014, and the interest payments are repaid every six months.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2011
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